Correlation Between BNP Paribas and Creotech Instruments
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Creotech Instruments 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 Creotech Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas Bank and Creotech Instruments SA, you can compare the effects of market volatilities on BNP Paribas and Creotech Instruments 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 Creotech Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Creotech Instruments.
Diversification Opportunities for BNP Paribas and Creotech Instruments
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BNP and Creotech is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments 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 Bank are associated (or correlated) with Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of BNP Paribas i.e., BNP Paribas and Creotech Instruments go up and down completely randomly.
Pair Corralation between BNP Paribas and Creotech Instruments
Assuming the 90 days trading horizon BNP Paribas Bank is expected to generate 0.69 times more return on investment than Creotech Instruments. However, BNP Paribas Bank is 1.44 times less risky than Creotech Instruments. It trades about 0.05 of its potential returns per unit of risk. Creotech Instruments SA is currently generating about 0.03 per unit of risk. If you would invest 5,453 in BNP Paribas Bank on September 13, 2024 and sell it today you would earn a total of 2,807 from holding BNP Paribas Bank or generate 51.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Bank vs. Creotech Instruments SA
Performance |
| Timeline |
| BNP Paribas Bank |
| Creotech Instruments |
BNP Paribas and Creotech Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Creotech Instruments
The main advantage of trading using opposite BNP Paribas and Creotech Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Creotech Instruments 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 Creotech Instruments will offset losses from the drop in Creotech Instruments' long position.| BNP Paribas vs. UniCredit SpA | BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. ING Bank lski |
| Creotech Instruments vs. UniCredit SpA | Creotech Instruments vs. Movie Games SA | Creotech Instruments vs. Mlk Foods Public | Creotech Instruments vs. Alior Bank SA |
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 the Stocks Directory module to find actively traded stocks across global markets.
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