Correlation Between BNPP Greenbond and Lyxor UCITS

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

By analyzing existing cross correlation between BNPP Greenbond ETF and Lyxor UCITS Japan, you can compare the effects of market volatilities on BNPP Greenbond and Lyxor UCITS 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 BNPP Greenbond with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNPP Greenbond and Lyxor UCITS.

Diversification Opportunities for BNPP Greenbond and Lyxor UCITS

0.0

Correlation Coefficient

BNPP Greenbond  Lyxor UCITS

Pay attention - limited upside

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

Pair Corralation between BNPP Greenbond and Lyxor UCITS

If you would invest  21,665  in Lyxor UCITS Japan on December 21, 2024 and sell it today you would earn a total of  620.00  from holding Lyxor UCITS Japan or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BNPP Greenbond ETF  vs.  Lyxor UCITS Japan

BNPP Greenbond ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days BNPP Greenbond ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BNPP Greenbond is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Lyxor UCITS Japan

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lyxor UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BNPP Greenbond and Lyxor UCITS

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

The idea behind BNPP Greenbond ETF and Lyxor UCITS Japan 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.