Correlation Between Amundi Index and ETC Group
Can any of the company-specific risk be diversified away by investing in both Amundi Index and ETC Group 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 ETC Group 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 ETC Group Global, you can compare the effects of market volatilities on Amundi Index and ETC Group 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 ETC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and ETC Group.
Diversification Opportunities for Amundi Index and ETC Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and ETC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and ETC Group Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC Group Global 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 ETC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC Group Global has no effect on the direction of Amundi Index i.e., Amundi Index and ETC Group go up and down completely randomly.
Pair Corralation between Amundi Index and ETC Group
Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the ETC Group. But the etf apears to be less risky and, when comparing its historical volatility, Amundi Index Solutions is 2.59 times less risky than ETC Group. The etf trades about -0.07 of its potential returns per unit of risk. The ETC Group Global is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 82,910 in ETC Group Global on September 1, 2024 and sell it today you would earn a total of 14,190 from holding ETC Group Global or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. ETC Group Global
Performance |
| Timeline |
| Amundi Index Solutions |
| ETC Group Global |
Amundi Index and ETC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and ETC Group
The main advantage of trading using opposite Amundi Index and ETC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, ETC Group 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 ETC Group will offset losses from the drop in ETC Group'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 |
| ETC Group vs. Vanguard FTSE Developed | ETC Group vs. Leverage Shares 2x | ETC Group vs. Amundi Index Solutions | ETC Group vs. Amundi Index Solutions |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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