Correlation Between Amundi Index and Lyxor PEA
Can any of the company-specific risk be diversified away by investing in both Amundi Index and Lyxor PEA 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 Lyxor PEA 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 Lyxor PEA Nasdaq, you can compare the effects of market volatilities on Amundi Index and Lyxor PEA 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 Lyxor PEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Lyxor PEA.
Diversification Opportunities for Amundi Index and Lyxor PEA
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amundi and Lyxor is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Lyxor PEA Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor PEA Nasdaq 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 Lyxor PEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor PEA Nasdaq has no effect on the direction of Amundi Index i.e., Amundi Index and Lyxor PEA go up and down completely randomly.
Pair Corralation between Amundi Index and Lyxor PEA
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 1.04 times more return on investment than Lyxor PEA. However, Amundi Index is 1.04 times more volatile than Lyxor PEA Nasdaq. It trades about 0.1 of its potential returns per unit of risk. Lyxor PEA Nasdaq is currently generating about 0.11 per unit of risk. If you would invest 13,394 in Amundi Index Solutions on August 24, 2024 and sell it today you would earn a total of 10,176 from holding Amundi Index Solutions or generate 75.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. Lyxor PEA Nasdaq
Performance |
| Timeline |
| Amundi Index Solutions |
| Lyxor PEA Nasdaq |
Amundi Index and Lyxor PEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and Lyxor PEA
The main advantage of trading using opposite Amundi Index and Lyxor PEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, Lyxor PEA 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 Lyxor PEA will offset losses from the drop in Lyxor PEA's long position.| Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Stoxx | Amundi Index vs. Amundi CAC 40 |
| Lyxor PEA vs. Lyxor SP 500 | Lyxor PEA vs. Lyxor UCITS Daily | Lyxor PEA vs. Lyxor UCITS MSCI | Lyxor PEA vs. Lyxor Treasury 10Y |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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