Correlation Between Amundi Index and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Amundi Index and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Amundi Index and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and FIRST TRUST.
Diversification Opportunities for Amundi Index and FIRST TRUST
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amundi and FIRST is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Amundi Index i.e., Amundi Index and FIRST TRUST go up and down completely randomly.
Pair Corralation between Amundi Index and FIRST TRUST
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 1.82 times more return on investment than FIRST TRUST. However, Amundi Index is 1.82 times more volatile than FIRST TRUST GLOBAL. It trades about 0.06 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.08 per unit of risk. If you would invest 3,525 in Amundi Index Solutions on September 25, 2024 and sell it today you would earn a total of 507.00 from holding Amundi Index Solutions or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Amundi Index Solutions |
| FIRST TRUST GLOBAL |
Amundi Index and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and FIRST TRUST
The main advantage of trading using opposite Amundi Index and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| Amundi Index vs. WisdomTree Natural Gas | Amundi Index vs. Leverage Shares 3x | Amundi Index vs. GraniteShares 3x Short | Amundi Index vs. WisdomTree Silver 3x |
| FIRST TRUST vs. Vanguard FTSE Developed | FIRST TRUST vs. Leverage Shares 2x | FIRST TRUST vs. Amundi Index Solutions | FIRST TRUST 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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