Correlation Between Multi Units and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Multi Units 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 Multi Units and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units France and BNP Paribas Easy, you can compare the effects of market volatilities on Multi Units 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 Multi Units with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and BNP Paribas.
Diversification Opportunities for Multi Units and BNP Paribas
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and BNP is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France 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 Multi Units 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 Multi Units France 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 Multi Units i.e., Multi Units and BNP Paribas go up and down completely randomly.
Pair Corralation between Multi Units and BNP Paribas
Assuming the 90 days trading horizon Multi Units France is expected to generate 1.1 times more return on investment than BNP Paribas. However, Multi Units is 1.1 times more volatile than BNP Paribas Easy. It trades about 0.05 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.03 per unit of risk. If you would invest 2,940 in Multi Units France on September 3, 2024 and sell it today you would earn a total of 215.00 from holding Multi Units France or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units France vs. BNP Paribas Easy
Performance |
| Timeline |
| Multi Units France |
| BNP Paribas Easy |
Multi Units and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and BNP Paribas
The main advantage of trading using opposite Multi Units and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units 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.| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor MSCI Brazil | Multi Units vs. MULTI UNITS LUXEMBOURG | Multi Units vs. Multi Units France |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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