Correlation Between Lyxor UCITS and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS 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 Lyxor UCITS and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Stoxx and BNP Paribas Easy, you can compare the effects of market volatilities on Lyxor UCITS 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 Lyxor UCITS with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and BNP Paribas.
Diversification Opportunities for Lyxor UCITS and BNP Paribas
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and BNP is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx 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 Lyxor UCITS 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 Lyxor UCITS Stoxx 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 Lyxor UCITS i.e., Lyxor UCITS and BNP Paribas go up and down completely randomly.
Pair Corralation between Lyxor UCITS and BNP Paribas
Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to generate 1.08 times more return on investment than BNP Paribas. However, Lyxor UCITS is 1.08 times more volatile than BNP Paribas Easy. It trades about 0.07 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.05 per unit of risk. If you would invest 3,917 in Lyxor UCITS Stoxx on September 5, 2024 and sell it today you would earn a total of 1,375 from holding Lyxor UCITS Stoxx or generate 35.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.02% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. BNP Paribas Easy
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| BNP Paribas Easy |
Lyxor UCITS and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and BNP Paribas
The main advantage of trading using opposite Lyxor UCITS and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS 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.| Lyxor UCITS vs. Lyxor Index Fund | Lyxor UCITS vs. Multi Units France | Lyxor UCITS vs. Lyxor UCITS MSCI | Lyxor UCITS vs. Multi Units France |
| BNP Paribas vs. Amundi Index Solutions | BNP Paribas vs. Manitou BF SA | BNP Paribas vs. 21Shares Polkadot ETP | BNP Paribas vs. Ekinops SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |