Correlation Between Astarta Holding and BNP Paribas

Can any of the company-specific risk be diversified away by investing in both Astarta Holding 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 Astarta Holding and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astarta Holding NV and BNP Paribas Bank, you can compare the effects of market volatilities on Astarta Holding 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 Astarta Holding with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astarta Holding and BNP Paribas.

Diversification Opportunities for Astarta Holding and BNP Paribas

0.46

Correlation Coefficient

Astarta Holding  BNP Paribas

Very weak diversification

The 3 months correlation between Astarta and BNP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Astarta Holding NV 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 Astarta Holding 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 Astarta Holding NV 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 Astarta Holding i.e., Astarta Holding and BNP Paribas go up and down completely randomly.

Pair Corralation between Astarta Holding and BNP Paribas

Assuming the 90 days trading horizon Astarta Holding NV is expected to generate 2.11 times more return on investment than BNP Paribas. However, Astarta Holding is 2.11 times more volatile than BNP Paribas Bank. It trades about 0.18 of its potential returns per unit of risk. BNP Paribas Bank is currently generating about 0.3 per unit of risk. If you would invest  4,000  in Astarta Holding NV on December 20, 2024 and sell it today you would earn a total of  1,670  from holding Astarta Holding NV or generate 41.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Astarta Holding NV  vs.  BNP Paribas Bank

Astarta Holding NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Astarta Holding NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Astarta Holding reported solid returns over the last few months and may actually be approaching a breakup point.

BNP Paribas Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas Bank are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BNP Paribas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astarta Holding and BNP Paribas

The main advantage of trading using opposite Astarta Holding and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astarta Holding 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 Astarta Holding NV and BNP Paribas Bank 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.