Correlation Between BNP Paribas and Amundi Index
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on BNP Paribas and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Amundi Index.
Diversification Opportunities for BNP Paribas and Amundi Index
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BNP and Amundi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Easy and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of BNP Paribas i.e., BNP Paribas and Amundi Index go up and down completely randomly.
Pair Corralation between BNP Paribas and Amundi Index
Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.02 times less return on investment than Amundi Index. But when comparing it to its historical volatility, BNP Paribas Easy is 1.19 times less risky than Amundi Index. It trades about 0.26 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 12,176 in Amundi Index Solutions on September 14, 2024 and sell it today you would earn a total of 406.00 from holding Amundi Index Solutions or generate 3.33% 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. Amundi Index Solutions
Performance |
| Timeline |
| BNP Paribas Easy |
| Amundi Index Solutions |
BNP Paribas and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Amundi Index
The main advantage of trading using opposite BNP Paribas and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| BNP Paribas vs. Lyxor UCITS Japan | BNP Paribas vs. Lyxor UCITS Japan | BNP Paribas vs. Lyxor UCITS Stoxx | BNP Paribas vs. Amundi CAC 40 |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi ETF PEA | Amundi Index vs. Amundi ETF PEA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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