Correlation Between SPDR MSCI and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI 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 SPDR MSCI and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Europe and BNP Paribas Easy, you can compare the effects of market volatilities on SPDR MSCI 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 SPDR MSCI with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and BNP Paribas.
Diversification Opportunities for SPDR MSCI and BNP Paribas
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and BNP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Europe 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 SPDR MSCI 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 SPDR MSCI Europe 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 SPDR MSCI i.e., SPDR MSCI and BNP Paribas go up and down completely randomly.
Pair Corralation between SPDR MSCI and BNP Paribas
Assuming the 90 days trading horizon SPDR MSCI Europe is expected to generate 0.72 times more return on investment than BNP Paribas. However, SPDR MSCI Europe is 1.39 times less risky than BNP Paribas. It trades about 0.25 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.11 per unit of risk. If you would invest 21,220 in SPDR MSCI Europe on November 2, 2024 and sell it today you would earn a total of 1,060 from holding SPDR MSCI Europe or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR MSCI Europe vs. BNP Paribas Easy
Performance |
| Timeline |
| SPDR MSCI Europe |
| BNP Paribas Easy |
SPDR MSCI and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and BNP Paribas
The main advantage of trading using opposite SPDR MSCI and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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.| SPDR MSCI vs. Lyxor UCITS NASDAQ 100 | SPDR MSCI vs. Lyxor UCITS Stoxx | SPDR MSCI vs. Lyxor UCITS MSCI | SPDR MSCI vs. Multi Units Luxembourg |
| BNP Paribas vs. BNP PARIBAS EASY | BNP Paribas vs. BNP Paribas Easy | BNP Paribas vs. BNP Paribas Easy | BNP Paribas 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |