Correlation Between Monnari Trade and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Monnari Trade 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 Monnari Trade and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monnari Trade SA and BNP Paribas Bank, you can compare the effects of market volatilities on Monnari Trade 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 Monnari Trade with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monnari Trade and BNP Paribas.
Diversification Opportunities for Monnari Trade and BNP Paribas
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monnari and BNP is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Monnari Trade SA and BNP Paribas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Bank and Monnari Trade 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 Monnari Trade SA 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 Bank has no effect on the direction of Monnari Trade i.e., Monnari Trade and BNP Paribas go up and down completely randomly.
Pair Corralation between Monnari Trade and BNP Paribas
Assuming the 90 days trading horizon Monnari Trade is expected to generate 4.01 times less return on investment than BNP Paribas. But when comparing it to its historical volatility, Monnari Trade SA is 1.09 times less risky than BNP Paribas. It trades about 0.02 of its potential returns per unit of risk. BNP Paribas Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,241 in BNP Paribas Bank on September 16, 2024 and sell it today you would earn a total of 3,079 from holding BNP Paribas Bank or generate 58.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monnari Trade SA vs. BNP Paribas Bank
Performance |
| Timeline |
| Monnari Trade SA |
| BNP Paribas Bank |
Monnari Trade and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monnari Trade and BNP Paribas
The main advantage of trading using opposite Monnari Trade and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monnari Trade 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.| Monnari Trade vs. LPP SA | Monnari Trade vs. Asseco Business Solutions | Monnari Trade vs. Detalion Games SA | Monnari Trade vs. Asseco South Eastern |
| BNP Paribas vs. LSI Software SA | BNP Paribas vs. Mlk Foods Public | BNP Paribas vs. Ultimate Games SA | BNP Paribas vs. True Games Syndicate |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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