Correlation Between Amundi Index and Xtrackers USD
Can any of the company-specific risk be diversified away by investing in both Amundi Index and Xtrackers USD 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 Xtrackers USD 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 Xtrackers USD Corporate, you can compare the effects of market volatilities on Amundi Index and Xtrackers USD 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 Xtrackers USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Xtrackers USD.
Diversification Opportunities for Amundi Index and Xtrackers USD
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amundi and Xtrackers is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Xtrackers USD Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers USD Corporate 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 Xtrackers USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers USD Corporate has no effect on the direction of Amundi Index i.e., Amundi Index and Xtrackers USD go up and down completely randomly.
Pair Corralation between Amundi Index and Xtrackers USD
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 3.32 times more return on investment than Xtrackers USD. However, Amundi Index is 3.32 times more volatile than Xtrackers USD Corporate. It trades about 0.04 of its potential returns per unit of risk. Xtrackers USD Corporate is currently generating about 0.04 per unit of risk. If you would invest 3,537 in Amundi Index Solutions on September 12, 2024 and sell it today you would earn a total of 566.00 from holding Amundi Index Solutions or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. Xtrackers USD Corporate
Performance |
| Timeline |
| Amundi Index Solutions |
| Xtrackers USD Corporate |
Amundi Index and Xtrackers USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and Xtrackers USD
The main advantage of trading using opposite Amundi Index and Xtrackers USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, Xtrackers USD 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 Xtrackers USD will offset losses from the drop in Xtrackers USD'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 Natural Gas |
| Xtrackers USD vs. Vanguard FTSE Developed | Xtrackers USD vs. Leverage Shares 2x | Xtrackers USD vs. Amundi Index Solutions | Xtrackers USD 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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