Correlation Between BNP Paribas and Live Nation
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Live Nation 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 BNP Paribas and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas SA and Live Nation Entertainment, you can compare the effects of market volatilities on BNP Paribas and Live Nation 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 BNP Paribas with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Live Nation.
Diversification Opportunities for BNP Paribas and Live Nation
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BNP and Live is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and BNP Paribas 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 BNP Paribas SA are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of BNP Paribas i.e., BNP Paribas and Live Nation go up and down completely randomly.
Pair Corralation between BNP Paribas and Live Nation
Assuming the 90 days horizon BNP Paribas SA is expected to generate 0.97 times more return on investment than Live Nation. However, BNP Paribas SA is 1.03 times less risky than Live Nation. It trades about 0.32 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.17 per unit of risk. If you would invest 5,777 in BNP Paribas SA on December 19, 2024 and sell it today you would earn a total of 2,056 from holding BNP Paribas SA or generate 35.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BNP Paribas SA vs. Live Nation Entertainment
Performance |
Timeline |
BNP Paribas SA |
Live Nation Entertainment |
BNP Paribas and Live Nation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BNP Paribas and Live Nation
The main advantage of trading using opposite BNP Paribas and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.BNP Paribas vs. HOCHSCHILD MINING | BNP Paribas vs. PSI Software AG | BNP Paribas vs. Magic Software Enterprises | BNP Paribas vs. Scientific Games |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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