Correlation Between BNP Paribas and Azvalor Global

Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Azvalor Global 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 Azvalor Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BNP Paribas Midcap and Azvalor Global Value, you can compare the effects of market volatilities on BNP Paribas and Azvalor Global 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 Azvalor Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Azvalor Global.

Diversification Opportunities for BNP Paribas and Azvalor Global

0.0

Correlation Coefficient

BNP Paribas  Azvalor Global

Pay attention - limited upside

The 3 months correlation between BNP and Azvalor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Midcap and Azvalor Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azvalor Global Value 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 Midcap are associated (or correlated) with Azvalor Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azvalor Global Value has no effect on the direction of BNP Paribas i.e., BNP Paribas and Azvalor Global go up and down completely randomly.

Pair Corralation between BNP Paribas and Azvalor Global

Assuming the 90 days trading horizon BNP Paribas Midcap is expected to under-perform the Azvalor Global. But the fund apears to be less risky and, when comparing its historical volatility, BNP Paribas Midcap is 53.38 times less risky than Azvalor Global. The fund trades about 0.0 of its potential returns per unit of risk. The Azvalor Global Value is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  19,135  in Azvalor Global Value on October 5, 2024 and sell it today you would lose (44.00) from holding Azvalor Global Value or give up 0.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

BNP Paribas Midcap  vs.  Azvalor Global Value

BNP Paribas Midcap

Risk-Adjusted Performance

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Very Weak

Over the last 90 days BNP Paribas Midcap has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, BNP Paribas is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Azvalor Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azvalor Global Value has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Azvalor Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BNP Paribas and Azvalor Global

The main advantage of trading using opposite BNP Paribas and Azvalor Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Azvalor Global 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 Azvalor Global will offset losses from the drop in Azvalor Global's long position.

The idea behind BNP Paribas Midcap and Azvalor Global Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.