Correlation Between BNP Paribas and LSI Software
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and LSI Software 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 LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas Bank and LSI Software SA, you can compare the effects of market volatilities on BNP Paribas and LSI Software 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 LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and LSI Software.
Diversification Opportunities for BNP Paribas and LSI Software
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and LSI is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA 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 Bank are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and LSI Software go up and down completely randomly.
Pair Corralation between BNP Paribas and LSI Software
Assuming the 90 days trading horizon BNP Paribas Bank is expected to under-perform the LSI Software. But the stock apears to be less risky and, when comparing its historical volatility, BNP Paribas Bank is 1.89 times less risky than LSI Software. The stock trades about 0.0 of its potential returns per unit of risk. The LSI Software SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,500 in LSI Software SA on September 24, 2024 and sell it today you would earn a total of 100.00 from holding LSI Software SA or generate 6.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BNP Paribas Bank vs. LSI Software SA
Performance |
Timeline |
BNP Paribas Bank |
LSI Software SA |
BNP Paribas and LSI Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BNP Paribas and LSI Software
The main advantage of trading using opposite BNP Paribas and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.BNP Paribas vs. UniCredit SpA | BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. ING Bank lski |
LSI Software vs. MW Trade SA | LSI Software vs. GreenX Metals | LSI Software vs. Marie Brizard Wine | LSI Software vs. Echo Investment SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Stocks Directory Find actively traded stocks across global markets |