Correlation Between BNP Paribas and EasyETF BNP
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and EasyETF BNP 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 EasyETF BNP 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 EasyETF BNP, you can compare the effects of market volatilities on BNP Paribas and EasyETF BNP 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 EasyETF BNP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and EasyETF BNP.
Diversification Opportunities for BNP Paribas and EasyETF BNP
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNP and EasyETF is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and EasyETF BNP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyETF BNP 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 EasyETF BNP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyETF BNP has no effect on the direction of BNP Paribas i.e., BNP Paribas and EasyETF BNP go up and down completely randomly.
Pair Corralation between BNP Paribas and EasyETF BNP
Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.69 times less return on investment than EasyETF BNP. But when comparing it to its historical volatility, BNP Paribas Easy is 1.43 times less risky than EasyETF BNP. It trades about 0.29 of its potential returns per unit of risk. EasyETF BNP is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,640 in EasyETF BNP on September 1, 2024 and sell it today you would earn a total of 225.00 from holding EasyETF BNP or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BNP Paribas Easy vs. EasyETF BNP
Performance |
| Timeline |
| BNP Paribas Easy |
| EasyETF BNP |
BNP Paribas and EasyETF BNP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and EasyETF BNP
The main advantage of trading using opposite BNP Paribas and EasyETF BNP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, EasyETF BNP 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 EasyETF BNP will offset losses from the drop in EasyETF BNP's long position.| BNP Paribas vs. EasyETF BNP | BNP Paribas vs. Amundi Index Solutions | BNP Paribas vs. Amundi ETF PEA | BNP Paribas vs. Amundi ETF PEA |
| EasyETF BNP vs. Amundi ETF PEA | EasyETF BNP vs. Amundi Index Solutions | EasyETF BNP vs. Amundi ETF PEA | EasyETF BNP vs. Amundi Index Solutions |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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