Correlation Between Lyxor CAC and BNP PARIBAS
Can any of the company-specific risk be diversified away by investing in both Lyxor CAC 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 CAC 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 CAC 40 and BNP PARIBAS EASY, you can compare the effects of market volatilities on Lyxor CAC 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 CAC with a short position of BNP PARIBAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor CAC and BNP PARIBAS.
Diversification Opportunities for Lyxor CAC and BNP PARIBAS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and BNP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor CAC 40 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 CAC 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 CAC 40 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 CAC i.e., Lyxor CAC and BNP PARIBAS go up and down completely randomly.
Pair Corralation between Lyxor CAC and BNP PARIBAS
Assuming the 90 days trading horizon Lyxor CAC is expected to generate 11.57 times less return on investment than BNP PARIBAS. In addition to that, Lyxor CAC is 1.11 times more volatile than BNP PARIBAS EASY. It trades about 0.01 of its total potential returns per unit of risk. BNP PARIBAS EASY is currently generating about 0.15 per unit of volatility. If you would invest 1,111 in BNP PARIBAS EASY on August 27, 2024 and sell it today you would earn a total of 339.00 from holding BNP PARIBAS EASY or generate 30.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor CAC 40 vs. BNP PARIBAS EASY
Performance |
| Timeline |
| Lyxor CAC 40 |
| BNP PARIBAS EASY |
Lyxor CAC and BNP PARIBAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor CAC and BNP PARIBAS
The main advantage of trading using opposite Lyxor CAC and BNP PARIBAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor CAC 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's long position.| Lyxor CAC vs. Lyxor UCITS Japan | Lyxor CAC vs. Lyxor UCITS Stoxx | Lyxor CAC vs. Gold Bullion Securities | Lyxor CAC vs. Xtrackers MSCI Europe |
| BNP PARIBAS vs. Lyxor UCITS Japan | BNP PARIBAS vs. Lyxor UCITS Japan | BNP PARIBAS vs. Lyxor UCITS Stoxx | BNP PARIBAS vs. Amundi CAC 40 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |