Correlation Between STRAYER EDUCATION and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION 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 STRAYER EDUCATION and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and BNP Paribas SA, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and BNP Paribas.
Diversification Opportunities for STRAYER EDUCATION and BNP Paribas
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRAYER and BNP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and STRAYER EDUCATION 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 STRAYER EDUCATION 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 SA has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and BNP Paribas go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and BNP Paribas
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 1.29 times more return on investment than BNP Paribas. However, STRAYER EDUCATION is 1.29 times more volatile than BNP Paribas SA. It trades about 0.02 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.03 per unit of risk. If you would invest 8,120 in STRAYER EDUCATION on November 7, 2024 and sell it today you would earn a total of 1,330 from holding STRAYER EDUCATION or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. BNP Paribas SA
Performance |
| Timeline |
| STRAYER EDUCATION |
| BNP Paribas SA |
STRAYER EDUCATION and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and BNP Paribas
The main advantage of trading using opposite STRAYER EDUCATION and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. DELTA AIR LINES | STRAYER EDUCATION vs. Ryanair Holdings plc | STRAYER EDUCATION vs. Osisko Metals | STRAYER EDUCATION vs. Fortescue Metals Group |
| BNP Paribas vs. Nishi Nippon Railroad Co | BNP Paribas vs. Osisko Metals | BNP Paribas vs. Broadcom | BNP Paribas vs. Gaztransport Technigaz 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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