Correlation Between Centrum Finansowe and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe 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 Centrum Finansowe and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrum Finansowe Banku and BNP Paribas Bank, you can compare the effects of market volatilities on Centrum Finansowe 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 Centrum Finansowe with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and BNP Paribas.
Diversification Opportunities for Centrum Finansowe and BNP Paribas
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrum and BNP is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku 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 Centrum Finansowe 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 Centrum Finansowe Banku 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 Centrum Finansowe i.e., Centrum Finansowe and BNP Paribas go up and down completely randomly.
Pair Corralation between Centrum Finansowe and BNP Paribas
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 1.72 times more return on investment than BNP Paribas. However, Centrum Finansowe is 1.72 times more volatile than BNP Paribas Bank. It trades about 0.17 of its potential returns per unit of risk. BNP Paribas Bank is currently generating about 0.23 per unit of risk. If you would invest 520.00 in Centrum Finansowe Banku on November 19, 2024 and sell it today you would earn a total of 45.00 from holding Centrum Finansowe Banku or generate 8.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Centrum Finansowe Banku vs. BNP Paribas Bank
Performance |
Timeline |
Centrum Finansowe Banku |
BNP Paribas Bank |
Centrum Finansowe and BNP Paribas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Centrum Finansowe and BNP Paribas
The main advantage of trading using opposite Centrum Finansowe and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe 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.Centrum Finansowe vs. Igoria Trade SA | Centrum Finansowe vs. Creativeforge Games SA | Centrum Finansowe vs. Kool2play SA | Centrum Finansowe vs. Examobile SA |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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