Correlation Between BNP Paribas and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and IShares 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 IShares 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 iShares MSCI USA, you can compare the effects of market volatilities on BNP Paribas and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and IShares MSCI.
Diversification Opportunities for BNP Paribas and IShares MSCI
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BNP and IShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of BNP Paribas i.e., BNP Paribas and IShares MSCI go up and down completely randomly.
Pair Corralation between BNP Paribas and IShares MSCI
Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.64 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, BNP Paribas Easy is 1.1 times less risky than IShares MSCI. It trades about 0.1 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,090 in iShares MSCI USA on October 24, 2024 and sell it today you would earn a total of 27.00 from holding iShares MSCI USA or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Easy vs. iShares MSCI USA
Performance |
| Timeline |
| BNP Paribas Easy |
| iShares MSCI USA |
BNP Paribas and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and IShares MSCI
The main advantage of trading using opposite BNP Paribas and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI'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 |
| IShares MSCI vs. iShares Euro Dividend | IShares MSCI vs. iShares II Public | IShares MSCI vs. Vanguard USD Treasury | IShares MSCI vs. BNP Paribas Easy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |