Correlation Between Spire Global and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Spire Global 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 Spire Global and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and BNP Paribas Easy, you can compare the effects of market volatilities on Spire Global 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 Spire Global with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and BNP Paribas.
Diversification Opportunities for Spire Global and BNP Paribas
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and BNP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and BNP Paribas Easy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Easy and Spire Global 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 Spire Global 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 Easy has no effect on the direction of Spire Global i.e., Spire Global and BNP Paribas go up and down completely randomly.
Pair Corralation between Spire Global and BNP Paribas
Given the investment horizon of 90 days Spire Global is expected to generate 5.17 times more return on investment than BNP Paribas. However, Spire Global is 5.17 times more volatile than BNP Paribas Easy. It trades about 0.05 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.04 per unit of risk. If you would invest 1,000.00 in Spire Global on September 3, 2024 and sell it today you would earn a total of 634.00 from holding Spire Global or generate 63.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
Spire Global vs. BNP Paribas Easy
Performance |
| Timeline |
| Spire Global |
| BNP Paribas Easy |
Spire Global and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and BNP Paribas
The main advantage of trading using opposite Spire Global and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global 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.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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