Correlation Between BNP Paribas and 3R Games

Can any of the company-specific risk be diversified away by investing in both BNP Paribas and 3R Games 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 3R Games into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BNP Paribas Bank and 3R Games SA, you can compare the effects of market volatilities on BNP Paribas and 3R Games 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 3R Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and 3R Games.

Diversification Opportunities for BNP Paribas and 3R Games

-0.6

Correlation Coefficient

BNP Paribas  3R Games

Excellent diversification

The 3 months correlation between BNP and 3RG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and 3R Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3R Games SA 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 Bank are associated (or correlated) with 3R Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3R Games SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and 3R Games go up and down completely randomly.

Pair Corralation between BNP Paribas and 3R Games

Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.13 times less return on investment than 3R Games. But when comparing it to its historical volatility, BNP Paribas Bank is 5.88 times less risky than 3R Games. It trades about 0.4 of its potential returns per unit of risk. 3R Games SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  34.00  in 3R Games SA on October 7, 2024 and sell it today you would earn a total of  2.00  from holding 3R Games SA or generate 5.88% return on investment over 90 days.

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

BNP Paribas Bank  vs.  3R Games SA

BNP Paribas Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BNP Paribas is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

3R Games SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 3R Games SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 3R Games reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BNP Paribas and 3R Games

The main advantage of trading using opposite BNP Paribas and 3R Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, 3R Games 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 3R Games will offset losses from the drop in 3R Games' long position.

The idea behind BNP Paribas Bank and 3R Games 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.