First, I've not tried this so I'm guessing what will happen from a physics point of view. I could be wrong, you'll just have to try it if you want to find out:

My guess is that the paracord will expand across the cord's diameter but not significantly across it's length. This would mean that it will actually be loose when it dries since it will increase the handle's thickness while wrapping it without contracting lengthwise after drying.

That's just my opinion, I could be wrong! <img src="images/graemlins/smile.gif" alt="" />