Correlation Between Cardano and BNP Paribas

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

By analyzing existing cross correlation between Cardano and BNP Paribas Easy, you can compare the effects of market volatilities on Cardano 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 Cardano with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and BNP Paribas.

Diversification Opportunities for Cardano and BNP Paribas

0.17

Correlation Coefficient

Cardano  BNP Paribas

Average diversification

The 3 months correlation between Cardano and BNP is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cardano 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 Cardano 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 Cardano 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 Cardano i.e., Cardano and BNP Paribas go up and down completely randomly.

Pair Corralation between Cardano and BNP Paribas

Assuming the 90 days trading horizon Cardano is expected to generate 8.12 times more return on investment than BNP Paribas. However, Cardano is 8.12 times more volatile than BNP Paribas Easy. It trades about 0.0 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about -0.08 per unit of risk. If you would invest  90.00  in Cardano on December 20, 2024 and sell it today you would lose (16.00) from holding Cardano or give up 17.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Cardano  vs.  BNP Paribas Easy

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cardano is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BNP Paribas Easy

Risk-Adjusted Performance

Very Weak

Over the last 90 days BNP Paribas Easy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, BNP Paribas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and BNP Paribas

The main advantage of trading using opposite Cardano and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano 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.

The idea behind Cardano and BNP Paribas Easy 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.