Correlation Between New Tech and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both New Tech 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 New Tech and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Tech Venture and BNP Paribas Bank, you can compare the effects of market volatilities on New Tech 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 New Tech with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Tech and BNP Paribas.
Diversification Opportunities for New Tech and BNP Paribas
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and BNP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding New Tech Venture 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 New Tech 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 New Tech Venture 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 New Tech i.e., New Tech and BNP Paribas go up and down completely randomly.
Pair Corralation between New Tech and BNP Paribas
Assuming the 90 days trading horizon New Tech Venture is expected to under-perform the BNP Paribas. In addition to that, New Tech is 1.36 times more volatile than BNP Paribas Bank. It trades about -0.22 of its total potential returns per unit of risk. BNP Paribas Bank is currently generating about -0.02 per unit of volatility. If you would invest 8,980 in BNP Paribas Bank on November 8, 2024 and sell it today you would lose (80.00) from holding BNP Paribas Bank or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
New Tech Venture vs. BNP Paribas Bank
Performance |
| Timeline |
| New Tech Venture |
| BNP Paribas Bank |
New Tech and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Tech and BNP Paribas
The main advantage of trading using opposite New Tech and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Tech 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.| New Tech vs. TEN SQUARE GAMES | New Tech vs. Centrum Finansowe Banku | New Tech vs. Bank Millennium SA | New Tech vs. True Games Syndicate |
| BNP Paribas vs. GreenX Metals | BNP Paribas vs. mBank SA | BNP Paribas vs. Echo Investment SA | BNP Paribas vs. Ultimate Games SA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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