Correlation Between BNP Paribas and ED Invest
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and ED Invest 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 ED Invest 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 ED Invest SA, you can compare the effects of market volatilities on BNP Paribas and ED Invest 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 ED Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and ED Invest.
Diversification Opportunities for BNP Paribas and ED Invest
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between BNP and EDI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and ED Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Invest SA 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 ED Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Invest SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and ED Invest go up and down completely randomly.
Pair Corralation between BNP Paribas and ED Invest
Assuming the 90 days trading horizon BNP Paribas is expected to generate 3.56 times less return on investment than ED Invest. In addition to that, BNP Paribas is 1.32 times more volatile than ED Invest SA. It trades about 0.1 of its total potential returns per unit of risk. ED Invest SA is currently generating about 0.49 per unit of volatility. If you would invest 576.00 in ED Invest SA on November 2, 2024 and sell it today you would earn a total of 72.00 from holding ED Invest SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BNP Paribas Bank vs. ED Invest SA
Performance |
| Timeline |
| BNP Paribas Bank |
| ED Invest SA |
BNP Paribas and ED Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and ED Invest
The main advantage of trading using opposite BNP Paribas and ED Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, ED Invest 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 ED Invest will offset losses from the drop in ED Invest's long position.| BNP Paribas vs. Igoria Trade SA | BNP Paribas vs. Kool2play SA | BNP Paribas vs. Globe Trade Centre | BNP Paribas vs. Monnari Trade SA |
| ED Invest vs. Echo Investment SA | ED Invest vs. Santander Bank Polska | ED Invest vs. New Tech Venture | ED Invest vs. GreenX Metals |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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