Correlation Between BNP Paribas and BGF Euro
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By analyzing existing cross correlation between BNP Paribas Midcap and BGF Euro Markets, you can compare the effects of market volatilities on BNP Paribas and BGF Euro 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 BGF Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and BGF Euro.
Diversification Opportunities for BNP Paribas and BGF Euro
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BNP and BGF is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Midcap and BGF Euro Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Euro Markets 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 Midcap are associated (or correlated) with BGF Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Euro Markets has no effect on the direction of BNP Paribas i.e., BNP Paribas and BGF Euro go up and down completely randomly.
Pair Corralation between BNP Paribas and BGF Euro
Assuming the 90 days trading horizon BNP Paribas Midcap is expected to under-perform the BGF Euro. But the fund apears to be less risky and, when comparing its historical volatility, BNP Paribas Midcap is 1.27 times less risky than BGF Euro. The fund trades about -0.07 of its potential returns per unit of risk. The BGF Euro Markets is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,519 in BGF Euro Markets on September 1, 2024 and sell it today you would lose (182.00) from holding BGF Euro Markets or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Midcap vs. BGF Euro Markets
Performance |
| Timeline |
| BNP Paribas Midcap |
| BGF Euro Markets |
BNP Paribas and BGF Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and BGF Euro
The main advantage of trading using opposite BNP Paribas and BGF Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, BGF Euro 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 BGF Euro will offset losses from the drop in BGF Euro's long position.The idea behind BNP Paribas Midcap and BGF Euro Markets 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.| BGF Euro vs. Groupama Entreprises N | BGF Euro vs. Renaissance Europe C | BGF Euro vs. Superior Plus Corp | BGF Euro vs. Origin Agritech |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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