Correlation Between BNP Paribas and Eastern Michigan
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Eastern Michigan 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 Eastern Michigan 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 Eastern Michigan Financial, you can compare the effects of market volatilities on BNP Paribas and Eastern Michigan 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 Eastern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Eastern Michigan.
Diversification Opportunities for BNP Paribas and Eastern Michigan
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BNP and Eastern is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Eastern Michigan Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Michigan Fin 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 Eastern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Michigan Fin has no effect on the direction of BNP Paribas i.e., BNP Paribas and Eastern Michigan go up and down completely randomly.
Pair Corralation between BNP Paribas and Eastern Michigan
Assuming the 90 days horizon BNP Paribas SA is expected to generate 1.43 times more return on investment than Eastern Michigan. However, BNP Paribas is 1.43 times more volatile than Eastern Michigan Financial. It trades about 0.36 of its potential returns per unit of risk. Eastern Michigan Financial is currently generating about 0.43 per unit of risk. If you would invest 3,070 in BNP Paribas SA on November 1, 2024 and sell it today you would earn a total of 291.00 from holding BNP Paribas SA or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Eastern Michigan Financial
Performance |
| Timeline |
| BNP Paribas SA |
| Eastern Michigan Fin |
BNP Paribas and Eastern Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Eastern Michigan
The main advantage of trading using opposite BNP Paribas and Eastern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Eastern Michigan 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 Eastern Michigan will offset losses from the drop in Eastern Michigan's long position.| BNP Paribas vs. Societe Generale ADR | BNP Paribas vs. Intesa Sanpaolo SpA | BNP Paribas vs. Commerzbank AG PK | BNP Paribas vs. Swedbank AB |
| Eastern Michigan vs. Commercial National Financial | Eastern Michigan vs. Mifflinburg Bancorp | Eastern Michigan vs. Apollo Bancorp | Eastern Michigan vs. Community Bankers |
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 CEOs Directory module to screen CEOs from public companies around the world.
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