Correlation Between Microsoft and BNP Paribas
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By analyzing existing cross correlation between Microsoft and BNP Paribas Midcap, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and BNP Paribas.
Diversification Opportunities for Microsoft and BNP Paribas
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and BNP is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and BNP Paribas Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Midcap and Microsoft 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 Microsoft 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 Midcap has no effect on the direction of Microsoft i.e., Microsoft and BNP Paribas go up and down completely randomly.
Pair Corralation between Microsoft and BNP Paribas
Given the investment horizon of 90 days Microsoft is expected to generate 1.68 times more return on investment than BNP Paribas. However, Microsoft is 1.68 times more volatile than BNP Paribas Midcap. It trades about 0.08 of its potential returns per unit of risk. BNP Paribas Midcap is currently generating about 0.01 per unit of risk. If you would invest 25,277 in Microsoft on September 3, 2024 and sell it today you would earn a total of 17,821 from holding Microsoft or generate 70.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.21% |
| Values | Daily Returns |
Microsoft vs. BNP Paribas Midcap
Performance |
| Timeline |
| Microsoft |
| BNP Paribas Midcap |
Microsoft and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and BNP Paribas
The main advantage of trading using opposite Microsoft and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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