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 SA, 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

0.58

Correlation Coefficient

MOVIE GAMES  BNP Paribas

Very weak diversification

The 3 months correlation between MOVIE and BNP is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA 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 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 SA 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 horizon MOVIE GAMES SA is expected to generate 4.31 times more return on investment than BNP Paribas. However, MOVIE GAMES is 4.31 times more volatile than BNP Paribas SA. It trades about 0.18 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.38 per unit of risk. If you would invest  356.00  in MOVIE GAMES SA on October 26, 2024 and sell it today you would earn a total of  53.00  from holding MOVIE GAMES SA or generate 14.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

MOVIE GAMES SA  vs.  BNP Paribas SA

MOVIE GAMES SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOVIE GAMES may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BNP Paribas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BNP Paribas is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

The idea behind MOVIE GAMES SA and BNP Paribas SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.