Correlation Between Manitou BF and BNP Paribas

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

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

Diversification Opportunities for Manitou BF and BNP Paribas

0.28

Correlation Coefficient

Manitou BF  BNP Paribas

Modest diversification

The 3 months correlation between Manitou and BNP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and BNP Paribas Easy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Easy and Manitou BF 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 Manitou BF 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 Easy has no effect on the direction of Manitou BF i.e., Manitou BF and BNP Paribas go up and down completely randomly.

Pair Corralation between Manitou BF and BNP Paribas

Assuming the 90 days trading horizon Manitou BF SA is expected to generate 3.47 times more return on investment than BNP Paribas. However, Manitou BF is 3.47 times more volatile than BNP Paribas Easy. It trades about 0.24 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about -0.04 per unit of risk. If you would invest  1,710  in Manitou BF SA on October 10, 2024 and sell it today you would earn a total of  148.00  from holding Manitou BF SA or generate 8.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Manitou BF SA  vs.  BNP Paribas Easy

Manitou BF SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manitou BF SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Manitou BF may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BNP Paribas Easy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas Easy 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 current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Manitou BF and BNP Paribas

The main advantage of trading using opposite Manitou BF and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF 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 Manitou BF SA and BNP Paribas Easy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..