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 2x 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
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leverage and Amundi is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x 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 2x 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 is expected to generate 1.57 times less return on investment than Amundi Index. In addition to that, Leverage Shares is 2.49 times more volatile than Amundi Index Solutions. It trades about 0.02 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.09 per unit of volatility. If you would invest 303,375 in Amundi Index Solutions on August 28, 2024 and sell it today you would earn a total of 17,050 from holding Amundi Index Solutions or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 2x vs. Amundi Index Solutions
Performance |
| Timeline |
| Leverage Shares 2x |
| 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. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Amundi Index vs. Vanguard FTSE Developed | Amundi Index vs. Leverage Shares 2x | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Albion Venture Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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