Correlation Between EasyETF BNP and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both EasyETF BNP 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 EasyETF BNP and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EasyETF BNP and BNP Paribas Easy, you can compare the effects of market volatilities on EasyETF BNP 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 EasyETF BNP with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of EasyETF BNP and BNP Paribas.
Diversification Opportunities for EasyETF BNP and BNP Paribas
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EasyETF and BNP is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding EasyETF BNP 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 EasyETF BNP 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 EasyETF BNP 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 EasyETF BNP i.e., EasyETF BNP and BNP Paribas go up and down completely randomly.
Pair Corralation between EasyETF BNP and BNP Paribas
Assuming the 90 days trading horizon EasyETF BNP is expected to generate 1.12 times more return on investment than BNP Paribas. However, EasyETF BNP is 1.12 times more volatile than BNP Paribas Easy. It trades about 0.16 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.14 per unit of risk. If you would invest 2,411 in EasyETF BNP on September 1, 2024 and sell it today you would earn a total of 454.00 from holding EasyETF BNP or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EasyETF BNP vs. BNP Paribas Easy
Performance |
| Timeline |
| EasyETF BNP |
| BNP Paribas Easy |
EasyETF BNP and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EasyETF BNP and BNP Paribas
The main advantage of trading using opposite EasyETF BNP and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EasyETF BNP 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.| EasyETF BNP vs. Amundi ETF PEA | EasyETF BNP vs. Amundi Index Solutions | EasyETF BNP vs. Amundi ETF PEA | EasyETF BNP vs. Amundi Index Solutions |
| BNP Paribas vs. EasyETF BNP | BNP Paribas vs. BNP Paribas Easy | BNP Paribas vs. BNP Paribas Easy | BNP Paribas vs. Amundi SP 500 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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