Correlation Between BNP Paribas and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI ACWI, you can compare the effects of market volatilities on BNP Paribas and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and SPDR MSCI.
Diversification Opportunities for BNP Paribas and SPDR MSCI
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and SPDR is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and SPDR MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI ACWI 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI ACWI has no effect on the direction of BNP Paribas i.e., BNP Paribas and SPDR MSCI go up and down completely randomly.
Pair Corralation between BNP Paribas and SPDR MSCI
Assuming the 90 days trading horizon BNP Paribas Easy is expected to generate 1.83 times more return on investment than SPDR MSCI. However, BNP Paribas is 1.83 times more volatile than SPDR MSCI ACWI. It trades about 0.13 of its potential returns per unit of risk. SPDR MSCI ACWI is currently generating about 0.2 per unit of risk. If you would invest 627.00 in BNP Paribas Easy on October 20, 2024 and sell it today you would earn a total of 18.00 from holding BNP Paribas Easy or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Easy vs. SPDR MSCI ACWI
Performance |
| Timeline |
| BNP Paribas Easy |
| SPDR MSCI ACWI |
BNP Paribas and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and SPDR MSCI
The main advantage of trading using opposite BNP Paribas and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| BNP Paribas vs. Lyxor UCITS Japan | BNP Paribas vs. Lyxor UCITS Japan | BNP Paribas vs. Lyxor UCITS Stoxx | BNP Paribas vs. Amundi CAC 40 |
| SPDR MSCI vs. Lyxor UCITS Japan | SPDR MSCI vs. Lyxor UCITS Japan | SPDR MSCI vs. Lyxor UCITS Stoxx | SPDR MSCI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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