Correlation Between Bondbloxx ETF and BNP Paribas

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

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

Diversification Opportunities for Bondbloxx ETF and BNP Paribas

0.37

Correlation Coefficient

Bondbloxx ETF  BNP Paribas

Weak diversification

The 3 months correlation between Bondbloxx and BNP is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust 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 Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Bondbloxx ETF i.e., Bondbloxx ETF and BNP Paribas go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and BNP Paribas

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.45 times more return on investment than BNP Paribas. However, Bondbloxx ETF Trust is 2.21 times less risky than BNP Paribas. It trades about -0.15 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  4,439  in Bondbloxx ETF Trust on September 18, 2024 and sell it today you would lose (427.00) from holding Bondbloxx ETF Trust or give up 9.62% of portfolio value over 90 days.

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

Bondbloxx ETF Trust  vs.  BNP Paribas SA

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

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 weak 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 Bondbloxx ETF and BNP Paribas

The main advantage of trading using opposite Bondbloxx ETF and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .