Correlation Between Growth Fund and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and BNP Paribas Easy, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and BNP Paribas.
Diversification Opportunities for Growth Fund and BNP Paribas
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and BNP is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of 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 Growth Fund 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 Growth Fund Of 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 Growth Fund i.e., Growth Fund and BNP Paribas go up and down completely randomly.
Pair Corralation between Growth Fund and BNP Paribas
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.52 times more return on investment than BNP Paribas. However, Growth Fund is 1.52 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 0.22 per unit of risk. If you would invest 7,457 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 374.00 from holding Growth Fund Of or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Growth Fund Of vs. BNP Paribas Easy
Performance |
| Timeline |
| Growth Fund |
| BNP Paribas Easy |
Growth Fund and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and BNP Paribas
The main advantage of trading using opposite Growth Fund and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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