Correlation Between Amundi Index and Power Metal
Can any of the company-specific risk be diversified away by investing in both Amundi Index and Power Metal 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 Power Metal 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 Power Metal Resources, you can compare the effects of market volatilities on Amundi Index and Power Metal 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 Power Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Power Metal.
Diversification Opportunities for Amundi Index and Power Metal
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and Power is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources 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 Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of Amundi Index i.e., Amundi Index and Power Metal go up and down completely randomly.
Pair Corralation between Amundi Index and Power Metal
Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the Power Metal. But the etf apears to be less risky and, when comparing its historical volatility, Amundi Index Solutions is 3.42 times less risky than Power Metal. The etf trades about -0.15 of its potential returns per unit of risk. The Power Metal Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,525 in Power Metal Resources on August 30, 2024 and sell it today you would lose (25.00) from holding Power Metal Resources or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. Power Metal Resources
Performance |
| Timeline |
| Amundi Index Solutions |
| Power Metal Resources |
Amundi Index and Power Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and Power Metal
The main advantage of trading using opposite Amundi Index and Power Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, Power Metal 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 Power Metal will offset losses from the drop in Power Metal's long position.| Amundi Index vs. GraniteShares 3x Short | Amundi Index vs. WisdomTree Natural Gas | Amundi Index vs. Leverage Shares 3x | Amundi Index vs. WisdomTree Natural Gas |
| Power Metal vs. Givaudan SA | Power Metal vs. Antofagasta PLC | Power Metal vs. Centamin PLC | Power Metal vs. Atalaya Mining |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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