Correlation Between Amundi Index and VanEck New
Can any of the company-specific risk be diversified away by investing in both Amundi Index and VanEck New 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 VanEck New 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 VanEck New China, you can compare the effects of market volatilities on Amundi Index and VanEck New 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 VanEck New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and VanEck New.
Diversification Opportunities for Amundi Index and VanEck New
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amundi and VanEck is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and VanEck New China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck New China 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 VanEck New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck New China has no effect on the direction of Amundi Index i.e., Amundi Index and VanEck New go up and down completely randomly.
Pair Corralation between Amundi Index and VanEck New
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 0.64 times more return on investment than VanEck New. However, Amundi Index Solutions is 1.55 times less risky than VanEck New. It trades about 0.04 of its potential returns per unit of risk. VanEck New China is currently generating about -0.01 per unit of risk. If you would invest 3,428 in Amundi Index Solutions on September 3, 2024 and sell it today you would earn a total of 584.00 from holding Amundi Index Solutions or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. VanEck New China
Performance |
| Timeline |
| Amundi Index Solutions |
| VanEck New China |
Amundi Index and VanEck New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and VanEck New
The main advantage of trading using opposite Amundi Index and VanEck New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, VanEck New 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 VanEck New will offset losses from the drop in VanEck New'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 |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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