Correlation Between Lyxor Index and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Lyxor Index 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 Lyxor Index and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor Index Fund and BNP Paribas Easy, you can compare the effects of market volatilities on Lyxor Index 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 Lyxor Index with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Index and BNP Paribas.
Diversification Opportunities for Lyxor Index and BNP Paribas
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and BNP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Index Fund 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 Lyxor Index 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 Lyxor Index Fund 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 Lyxor Index i.e., Lyxor Index and BNP Paribas go up and down completely randomly.
Pair Corralation between Lyxor Index and BNP Paribas
Assuming the 90 days trading horizon Lyxor Index Fund is expected to generate 0.46 times more return on investment than BNP Paribas. However, Lyxor Index Fund is 2.19 times less risky than BNP Paribas. It trades about 0.09 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.02 per unit of risk. If you would invest 1,986 in Lyxor Index Fund on August 30, 2024 and sell it today you would earn a total of 1,235 from holding Lyxor Index Fund or generate 62.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.49% |
| Values | Daily Returns |
Lyxor Index Fund vs. BNP Paribas Easy
Performance |
| Timeline |
| Lyxor Index Fund |
| BNP Paribas Easy |
Lyxor Index and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Index and BNP Paribas
The main advantage of trading using opposite Lyxor Index and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Index 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.| Lyxor Index vs. Lyxor UCITS Stoxx | Lyxor Index vs. Lyxor Index Fund | Lyxor Index vs. Lyxor Index Fund | Lyxor Index vs. Multi Units Luxembourg |
| BNP Paribas vs. BNP Paribas Easy | BNP Paribas vs. Multi Units Luxembourg | BNP Paribas vs. Lyxor UCITS MSCI | BNP Paribas vs. Lyxor Index Fund |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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