Correlation Between BNP Paribas and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Lyxor UCITS 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 BNP Paribas and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas Easy and Lyxor UCITS FTSE, you can compare the effects of market volatilities on BNP Paribas and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Lyxor UCITS.
Diversification Opportunities for BNP Paribas and Lyxor UCITS
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNP and Lyxor is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and Lyxor UCITS FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS FTSE 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 Easy are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS FTSE has no effect on the direction of BNP Paribas i.e., BNP Paribas and Lyxor UCITS go up and down completely randomly.
Pair Corralation between BNP Paribas and Lyxor UCITS
Assuming the 90 days trading horizon BNP Paribas Easy is expected to generate 1.02 times more return on investment than Lyxor UCITS. However, BNP Paribas is 1.02 times more volatile than Lyxor UCITS FTSE. It trades about -0.02 of its potential returns per unit of risk. Lyxor UCITS FTSE is currently generating about -0.04 per unit of risk. If you would invest 871.00 in BNP Paribas Easy on November 2, 2024 and sell it today you would lose (28.00) from holding BNP Paribas Easy or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Easy vs. Lyxor UCITS FTSE
Performance |
| Timeline |
| BNP Paribas Easy |
| Lyxor UCITS FTSE |
BNP Paribas and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Lyxor UCITS
The main advantage of trading using opposite BNP Paribas and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.| BNP Paribas vs. BNP Paribas Easy | BNP Paribas vs. Lyxor MSCI Brazil | BNP Paribas vs. Lyxor MSCI Indonesia | BNP Paribas vs. Amundi ETF MSCI |
| Lyxor UCITS vs. Amundi FTSE EPRANAREIT | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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