Correlation Between SBF 120 and BNPP Easy

Can any of the company-specific risk be diversified away by investing in both SBF 120 and BNPP Easy 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 SBF 120 and BNPP Easy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SBF 120 and BNPP Easy Next, you can compare the effects of market volatilities on SBF 120 and BNPP Easy 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 SBF 120 with a short position of BNPP Easy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBF 120 and BNPP Easy.

Diversification Opportunities for SBF 120 and BNPP Easy

0.0

Correlation Coefficient

SBF 120  BNPP Easy

Pay attention - limited upside

The 3 months correlation between SBF and BNPP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBF 120 and BNPP Easy Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNPP Easy Next and SBF 120 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 SBF 120 are associated (or correlated) with BNPP Easy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNPP Easy Next has no effect on the direction of SBF 120 i.e., SBF 120 and BNPP Easy go up and down completely randomly.

Pair Corralation between SBF 120 and BNPP Easy

If you would invest  536,440  in SBF 120 on October 11, 2024 and sell it today you would earn a total of  27,487  from holding SBF 120 or generate 5.12% return on investment over 90 days.

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

SBF 120  vs.  BNPP Easy Next

Pair Trading with SBF 120 and BNPP Easy

The main advantage of trading using opposite SBF 120 and BNPP Easy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBF 120 position performs unexpectedly, BNPP Easy 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 BNPP Easy will offset losses from the drop in BNPP Easy's long position.

The idea behind SBF 120 and BNPP Easy Next 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.