Correlation Between Leverage Shares and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Amundi Index 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 Leverage Shares and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and Amundi Index Solutions, you can compare the effects of market volatilities on Leverage Shares and Amundi Index 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 Leverage Shares with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Amundi Index.
Diversification Opportunities for Leverage Shares and Amundi Index
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leverage and Amundi is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Leverage Shares i.e., Leverage Shares and Amundi Index go up and down completely randomly.
Pair Corralation between Leverage Shares and Amundi Index
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 11.7 times more return on investment than Amundi Index. However, Leverage Shares is 11.7 times more volatile than Amundi Index Solutions. It trades about 0.24 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.03 per unit of risk. If you would invest 297,685 in Leverage Shares 3x on September 13, 2024 and sell it today you would earn a total of 4,026,625 from holding Leverage Shares 3x or generate 1352.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. Amundi Index Solutions
Performance |
| Timeline |
| Leverage Shares 3x |
| Amundi Index Solutions |
Leverage Shares and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Amundi Index
The main advantage of trading using opposite Leverage Shares and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. GraniteShares 3x Short | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 |
| Amundi Index vs. Amundi EUR High | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi MSCI Pacific | Amundi Index vs. Amundi MSCI Europe |
Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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