Correlation Between Amundi Index and Legal General
Can any of the company-specific risk be diversified away by investing in both Amundi Index and Legal General 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 Amundi Index and Legal General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi Index Solutions and Legal General UCITS, you can compare the effects of market volatilities on Amundi Index and Legal General 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 Amundi Index with a short position of Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Legal General.
Diversification Opportunities for Amundi Index and Legal General
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amundi and Legal is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS and Amundi Index 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 Amundi Index Solutions are associated (or correlated) with Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of Amundi Index i.e., Amundi Index and Legal General go up and down completely randomly.
Pair Corralation between Amundi Index and Legal General
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 0.65 times more return on investment than Legal General. However, Amundi Index Solutions is 1.54 times less risky than Legal General. It trades about 0.03 of its potential returns per unit of risk. Legal General UCITS is currently generating about -0.01 per unit of risk. If you would invest 277,775 in Amundi Index Solutions on August 30, 2024 and sell it today you would earn a total of 38,700 from holding Amundi Index Solutions or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. Legal General UCITS
Performance |
| Timeline |
| Amundi Index Solutions |
| Legal General UCITS |
Amundi Index and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and Legal General
The main advantage of trading using opposite Amundi Index and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Amundi Index vs. Amundi EUR High | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi MSCI Pacific | Amundi Index vs. Amundi MSCI Europe |
| Legal General vs. Legal General UCITS | Legal General vs. Legal General UCITS | Legal General vs. Legal General UCITS | Legal General vs. Legal General UCITS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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