Correlation Between BNP PARIBAS and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both BNP PARIBAS 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 BNP PARIBAS and BNP Paribas 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 BNP Paribas Easy, you can compare the effects of market volatilities on BNP PARIBAS 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 BNP PARIBAS with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP PARIBAS and BNP Paribas.
Diversification Opportunities for BNP PARIBAS and BNP Paribas
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BNP and BNP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BNP PARIBAS EASY 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 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 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 BNP PARIBAS i.e., BNP PARIBAS and BNP Paribas go up and down completely randomly.
Pair Corralation between BNP PARIBAS and BNP Paribas
Assuming the 90 days trading horizon BNP PARIBAS EASY is expected to generate 2.42 times more return on investment than BNP Paribas. However, BNP PARIBAS is 2.42 times more volatile than BNP Paribas Easy. It trades about 0.13 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.06 per unit of risk. If you would invest 1,067 in BNP PARIBAS EASY on September 2, 2024 and sell it today you would earn a total of 396.00 from holding BNP PARIBAS EASY or generate 37.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.11% |
| Values | Daily Returns |
BNP PARIBAS EASY vs. BNP Paribas Easy
Performance |
| Timeline |
| BNP PARIBAS EASY |
| BNP Paribas Easy |
BNP PARIBAS and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP PARIBAS and BNP Paribas
The main advantage of trading using opposite BNP PARIBAS and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP PARIBAS 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.| BNP PARIBAS vs. Lyxor UCITS Japan | BNP PARIBAS vs. Lyxor UCITS Japan | BNP PARIBAS vs. Lyxor UCITS Stoxx | BNP PARIBAS vs. Amundi CAC 40 |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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