Correlation Between Coda Octopus and BNP Paribas

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Can any of the company-specific risk be diversified away by investing in both Coda Octopus and BNP Paribas 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 Coda Octopus and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coda Octopus Group and BNP Paribas SA, you can compare the effects of market volatilities on Coda Octopus and BNP Paribas 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 Coda Octopus with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and BNP Paribas.

Diversification Opportunities for Coda Octopus and BNP Paribas

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Coda Octopus and BNPQF is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of Coda Octopus i.e., Coda Octopus and BNP Paribas go up and down completely randomly.

Pair Corralation between Coda Octopus and BNP Paribas

Given the investment horizon of 90 days Coda Octopus Group is expected to under-perform the BNP Paribas. But the stock apears to be less risky and, when comparing its historical volatility, Coda Octopus Group is 1.32 times less risky than BNP Paribas. The stock trades about -0.03 of its potential returns per unit of risk. The BNP Paribas SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5,648  in BNP Paribas SA on September 5, 2022 and sell it today you would lose (208.00)  from holding BNP Paribas SA or give up 3.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Coda Octopus Group  vs.  BNP Paribas SA

 Performance (%) 
       Timeline  
Coda Octopus Group 
Coda Octopus Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Coda Octopus Price Channel

BNP Paribas SA 
BNPQF Performance
7 of 100
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 rather weak basic indicators, BNP Paribas exhibited solid returns over the last few months and may actually be approaching a breakup point.

BNPQF Price Channel

Coda Octopus and BNP Paribas Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coda Octopus and BNP Paribas

The main advantage of trading using opposite Coda Octopus and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.
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The idea behind Coda Octopus Group and BNP Paribas SA 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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Check out your portfolio center. 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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