Correlation Between BNP Paribas and Multi Units
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Multi Units 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 Multi Units 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 Multi Units Luxembourg, you can compare the effects of market volatilities on BNP Paribas and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Multi Units.
Diversification Opportunities for BNP Paribas and Multi Units
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Multi is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of BNP Paribas i.e., BNP Paribas and Multi Units go up and down completely randomly.
Pair Corralation between BNP Paribas and Multi Units
Assuming the 90 days trading horizon BNP Paribas Easy is expected to under-perform the Multi Units. But the etf apears to be less risky and, when comparing its historical volatility, BNP Paribas Easy is 2.04 times less risky than Multi Units. The etf trades about -0.04 of its potential returns per unit of risk. The Multi Units Luxembourg is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,481 in Multi Units Luxembourg on November 2, 2024 and sell it today you would earn a total of 515.00 from holding Multi Units Luxembourg or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Easy vs. Multi Units Luxembourg
Performance |
| Timeline |
| BNP Paribas Easy |
| Multi Units Luxembourg |
BNP Paribas and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Multi Units
The main advantage of trading using opposite BNP Paribas and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| BNP Paribas vs. Lyxor UCITS NASDAQ 100 | BNP Paribas vs. Lyxor UCITS Stoxx | BNP Paribas vs. Lyxor UCITS MSCI | BNP Paribas vs. Multi Units Luxembourg |
| Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units France | Multi Units vs. Multi Units Luxembourg |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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