Correlation Between Leverage Shares and Amundi EUR
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Amundi EUR 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 EUR 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 EUR High, you can compare the effects of market volatilities on Leverage Shares and Amundi EUR 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 EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Amundi EUR.
Diversification Opportunities for Leverage Shares and Amundi EUR
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leverage and Amundi is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Amundi EUR High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi EUR High 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 EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi EUR High has no effect on the direction of Leverage Shares i.e., Leverage Shares and Amundi EUR go up and down completely randomly.
Pair Corralation between Leverage Shares and Amundi EUR
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 17.01 times more return on investment than Amundi EUR. However, Leverage Shares is 17.01 times more volatile than Amundi EUR High. It trades about 0.01 of its potential returns per unit of risk. Amundi EUR High is currently generating about 0.07 per unit of risk. If you would invest 5,040 in Leverage Shares 2x on August 29, 2024 and sell it today you would lose (7.00) from holding Leverage Shares 2x or give up 0.14% of portfolio value 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 EUR High
Performance |
| Timeline |
| Leverage Shares 2x |
| Amundi EUR High |
Leverage Shares and Amundi EUR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Amundi EUR
The main advantage of trading using opposite Leverage Shares and Amundi EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Amundi EUR 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 EUR will offset losses from the drop in Amundi EUR'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 EUR vs. Leverage Shares 2x | Amundi EUR vs. WisdomTree Silver 3x | Amundi EUR vs. Leverage Shares 2x | Amundi EUR vs. WisdomTree SP 500 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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