Correlation Between Eurobank Ergasias and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias SA and BNP Paribas SA, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and BNP Paribas.
Diversification Opportunities for Eurobank Ergasias and BNP Paribas
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eurobank and BNP is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA 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 Eurobank Ergasias 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 Eurobank Ergasias 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 SA has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and BNP Paribas go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and BNP Paribas
Assuming the 90 days horizon Eurobank Ergasias SA is expected to generate 0.95 times more return on investment than BNP Paribas. However, Eurobank Ergasias SA is 1.05 times less risky than BNP Paribas. It trades about 0.06 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.04 per unit of risk. If you would invest 50.00 in Eurobank Ergasias SA on January 25, 2024 and sell it today you would earn a total of 50.00 from holding Eurobank Ergasias SA or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eurobank Ergasias SA vs. BNP Paribas SA
Performance |
| Timeline |
| Eurobank Ergasias |
| BNP Paribas SA |
Eurobank Ergasias and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and BNP Paribas
The main advantage of trading using opposite Eurobank Ergasias and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. First Horizon | Eurobank Ergasias vs. First Horizon | Eurobank Ergasias vs. KB Financial Group | Eurobank Ergasias vs. Banco Santander Brasil |
| BNP Paribas vs. First Horizon | BNP Paribas vs. First Horizon | BNP Paribas vs. KB Financial Group | BNP Paribas vs. Banco Santander Brasil |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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