Correlation Between BNP Paribas and Otis Gold

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Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Otis Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BNP Paribas and Otis Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas SA and Otis Gold Corp, you can compare the effects of market volatilities on BNP Paribas and Otis Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BNP Paribas with a short position of Otis Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Otis Gold.

Diversification Opportunities for BNP Paribas and Otis Gold

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BNP and Otis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Otis Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otis Gold Corp and BNP Paribas is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BNP Paribas SA are associated (or correlated) with Otis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otis Gold Corp has no effect on the direction of BNP Paribas i.e., BNP Paribas and Otis Gold go up and down completely randomly.

Pair Corralation between BNP Paribas and Otis Gold

If you would invest  3,399  in BNP Paribas SA on January 25, 2024 and sell it today you would earn a total of  251.00  from holding BNP Paribas SA or generate 7.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

BNP Paribas SA  vs.  Otis Gold Corp

 Performance 
       Timeline  
BNP Paribas SA 

Risk-Adjusted Performance

7 of 100

 
Weak
 
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OK
Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, BNP Paribas may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Otis Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Otis Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Otis Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

BNP Paribas and Otis Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BNP Paribas and Otis Gold

The main advantage of trading using opposite BNP Paribas and Otis Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Otis Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Otis Gold will offset losses from the drop in Otis Gold's long position.
The idea behind BNP Paribas SA and Otis Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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