Correlation Between DAX Index and BNP Paribas
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By analyzing existing cross correlation between DAX Index and BNP Paribas SA, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and BNP Paribas.
Diversification Opportunities for DAX Index and BNP Paribas
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAX and BNP is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and DAX Index 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 DAX Index 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 SA has no effect on the direction of DAX Index i.e., DAX Index and BNP Paribas go up and down completely randomly.
Pair Corralation between DAX Index and BNP Paribas
Assuming the 90 days trading horizon DAX Index is expected to generate 1.28 times less return on investment than BNP Paribas. But when comparing it to its historical volatility, DAX Index is 1.94 times less risky than BNP Paribas. It trades about 0.54 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 5,833 in BNP Paribas SA on October 28, 2024 and sell it today you would earn a total of 524.00 from holding BNP Paribas SA or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. BNP Paribas SA
Performance |
| Timeline |
DAX Index and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
BNP Paribas SA
Pair trading matchups for BNP Paribas
Pair Trading with DAX Index and BNP Paribas
The main advantage of trading using opposite DAX Index and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Tianjin Capital Environmental | DAX Index vs. Cars Inc | DAX Index vs. INTER CARS SA | DAX Index vs. Khiron Life Sciences |
| BNP Paribas vs. JAPAN TOBACCO UNSPADR12 | BNP Paribas vs. STRAYER EDUCATION | BNP Paribas vs. betterU Education Corp | BNP Paribas vs. MAVEN WIRELESS SWEDEN |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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