Correlation Between Japan Asia and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and BNP Paribas SA, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and BNP Paribas.
Diversification Opportunities for Japan Asia and BNP Paribas
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and BNP is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment 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 Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and BNP Paribas go up and down completely randomly.
Pair Corralation between Japan Asia and BNP Paribas
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the BNP Paribas. In addition to that, Japan Asia is 1.58 times more volatile than BNP Paribas SA. It trades about -0.04 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.09 per unit of volatility. If you would invest 5,883 in BNP Paribas SA on October 14, 2024 and sell it today you would earn a total of 98.00 from holding BNP Paribas SA or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. BNP Paribas SA
Performance |
| Timeline |
| Japan Asia Investment |
| BNP Paribas SA |
Japan Asia and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and BNP Paribas
The main advantage of trading using opposite Japan Asia and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. WT OFFSHORE | Japan Asia vs. AEON STORES | Japan Asia vs. National Retail Properties | Japan Asia vs. Eidesvik Offshore ASA |
| BNP Paribas vs. EAT WELL INVESTMENT | BNP Paribas vs. Japan Asia Investment | BNP Paribas vs. TOREX SEMICONDUCTOR LTD | BNP Paribas vs. Magnachip Semiconductor |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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