Correlation Between BNPP BONDSRI and BNP Paribas

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

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

Diversification Opportunities for BNPP BONDSRI and BNP Paribas

0.78

Correlation Coefficient

BNPP BONDSRI  BNP Paribas

Poor diversification

The 3 months correlation between BNPP and BNP is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BNPP BONDSRI ETF 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 BNPP BONDSRI 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 BONDSRI ETF 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 BNPP BONDSRI i.e., BNPP BONDSRI and BNP Paribas go up and down completely randomly.

Pair Corralation between BNPP BONDSRI and BNP Paribas

Assuming the 90 days trading horizon BNPP BONDSRI ETF is expected to under-perform the BNP Paribas. In addition to that, BNPP BONDSRI is 1.13 times more volatile than BNP Paribas Easy. It trades about -0.02 of its total potential returns per unit of risk. BNP Paribas Easy is currently generating about 0.05 per unit of volatility. If you would invest  1,068  in BNP Paribas Easy on December 21, 2024 and sell it today you would earn a total of  7.00  from holding BNP Paribas Easy or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BNPP BONDSRI ETF  vs.  BNP Paribas Easy

BNPP BONDSRI ETF

Risk-Adjusted Performance

Very Weak

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

BNP Paribas Easy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas Easy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, BNP Paribas is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BNPP BONDSRI and BNP Paribas

The main advantage of trading using opposite BNPP BONDSRI and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNPP BONDSRI 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 BNPP BONDSRI ETF 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 Anywhere module to track or share privately all of your investments from the convenience of any device.