Correlation Between Christian Dior and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Christian Dior 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 Christian Dior and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Christian Dior SE and BNP Paribas SA, you can compare the effects of market volatilities on Christian Dior 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 Christian Dior with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and BNP Paribas.
Diversification Opportunities for Christian Dior and BNP Paribas
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Christian and BNP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Christian Dior 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 Christian Dior SE 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 SA has no effect on the direction of Christian Dior i.e., Christian Dior and BNP Paribas go up and down completely randomly.
Pair Corralation between Christian Dior and BNP Paribas
Assuming the 90 days trading horizon Christian Dior SE is expected to under-perform the BNP Paribas. In addition to that, Christian Dior is 1.06 times more volatile than BNP Paribas SA. It trades about -0.01 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.02 per unit of volatility. If you would invest 5,133 in BNP Paribas SA on September 26, 2024 and sell it today you would earn a total of 621.00 from holding BNP Paribas SA or generate 12.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Christian Dior SE vs. BNP Paribas SA
Performance |
Timeline |
Christian Dior SE |
BNP Paribas SA |
Christian Dior and BNP Paribas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Christian Dior and BNP Paribas
The main advantage of trading using opposite Christian Dior and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior 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.Christian Dior vs. FIPP SA | Christian Dior vs. Adomos SA | Christian Dior vs. Acheter Louer | Christian Dior vs. Manitou BF 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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