Correlation Between Movie Games and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Movie Games 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 Movie Games and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movie Games SA and BNP Paribas Bank, you can compare the effects of market volatilities on Movie Games 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 Movie Games with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and BNP Paribas.
Diversification Opportunities for Movie Games and BNP Paribas
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Movie and BNP is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games 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 Movie Games 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 Movie Games 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 Movie Games i.e., Movie Games and BNP Paribas go up and down completely randomly.
Pair Corralation between Movie Games and BNP Paribas
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the BNP Paribas. In addition to that, Movie Games is 1.88 times more volatile than BNP Paribas Bank. It trades about -0.01 of its total potential returns per unit of risk. BNP Paribas Bank is currently generating about 0.05 per unit of volatility. If you would invest 5,511 in BNP Paribas Bank on September 3, 2024 and sell it today you would earn a total of 2,769 from holding BNP Paribas Bank or generate 50.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movie Games SA vs. BNP Paribas Bank
Performance |
| Timeline |
| Movie Games SA |
| BNP Paribas Bank |
Movie Games and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and BNP Paribas
The main advantage of trading using opposite Movie Games and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games 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.| Movie Games vs. Skyline Investment SA | Movie Games vs. Globe Trade Centre | Movie Games vs. Echo Investment SA | Movie Games vs. X Trade Brokers |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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