Correlation Between Virtus Investment and BNP Paribas

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

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

Diversification Opportunities for Virtus Investment and BNP Paribas

-0.76

Correlation Coefficient

Virtus Investment  BNP Paribas

Pay attention - limited upside

The 3 months correlation between Virtus and BNP is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Virtus Investment 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 Virtus Investment Partners 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 SA has no effect on the direction of Virtus Investment i.e., Virtus Investment and BNP Paribas go up and down completely randomly.

Pair Corralation between Virtus Investment and BNP Paribas

Assuming the 90 days horizon Virtus Investment Partners is expected to generate 0.97 times more return on investment than BNP Paribas. However, Virtus Investment Partners is 1.03 times less risky than BNP Paribas. It trades about 0.1 of its potential returns per unit of risk. BNP Paribas SA is currently generating about -0.07 per unit of risk. If you would invest  22,400  in Virtus Investment Partners on September 18, 2024 and sell it today you would earn a total of  600.00  from holding Virtus Investment Partners or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Virtus Investment Partners  vs.  BNP Paribas SA

Virtus Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Investment Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Virtus Investment reported solid returns over the last few months and may actually be approaching a breakup point.

BNP Paribas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Virtus Investment and BNP Paribas

The main advantage of trading using opposite Virtus Investment and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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 Virtus Investment Partners and BNP Paribas SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.