Correlation Between Ossiam Irl and BNP Paribas

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

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

Diversification Opportunities for Ossiam Irl and BNP Paribas

0.97

Correlation Coefficient

Ossiam Irl  BNP Paribas

Almost no diversification

The 3 months correlation between Ossiam and BNP is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ossiam Irl Icav 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 Ossiam Irl 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 Ossiam Irl Icav 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 Ossiam Irl i.e., Ossiam Irl and BNP Paribas go up and down completely randomly.

Pair Corralation between Ossiam Irl and BNP Paribas

Assuming the 90 days trading horizon Ossiam Irl Icav is expected to generate 0.98 times more return on investment than BNP Paribas. However, Ossiam Irl Icav is 1.02 times less risky than BNP Paribas. It trades about -0.14 of its potential returns per unit of risk. BNP Paribas Easy is currently generating about -0.25 per unit of risk. If you would invest  20,880  in Ossiam Irl Icav on September 23, 2024 and sell it today you would lose (325.00) from holding Ossiam Irl Icav or give up 1.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Ossiam Irl Icav  vs.  BNP Paribas Easy

Ossiam Irl Icav

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Irl Icav are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ossiam Irl may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BNP Paribas Easy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas Easy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BNP Paribas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ossiam Irl and BNP Paribas

The main advantage of trading using opposite Ossiam Irl and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ossiam Irl 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 Ossiam Irl Icav 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.