Correlation Between Amundi PEA and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Amundi PEA and Amundi Index 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 PEA and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi PEA Eau and Amundi Index Solutions, you can compare the effects of market volatilities on Amundi PEA and Amundi Index 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 PEA with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi PEA and Amundi Index.
Diversification Opportunities for Amundi PEA and Amundi Index
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amundi and Amundi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amundi PEA Eau and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and Amundi PEA 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 PEA Eau are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Amundi PEA i.e., Amundi PEA and Amundi Index go up and down completely randomly.
Pair Corralation between Amundi PEA and Amundi Index
Assuming the 90 days trading horizon Amundi PEA Eau is expected to generate 4.47 times more return on investment than Amundi Index. However, Amundi PEA is 4.47 times more volatile than Amundi Index Solutions. It trades about 0.24 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.41 per unit of risk. If you would invest 3,044 in Amundi PEA Eau on September 1, 2024 and sell it today you would earn a total of 190.00 from holding Amundi PEA Eau or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amundi PEA Eau vs. Amundi Index Solutions
Performance |
| Timeline |
| Amundi PEA Eau |
| Amundi Index Solutions |
Amundi PEA and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi PEA and Amundi Index
The main advantage of trading using opposite Amundi PEA and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi PEA position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| Amundi PEA vs. Multi Units France | Amundi PEA vs. Lyxor MSCI China | Amundi PEA vs. Manitou BF SA | Amundi PEA vs. Ossiam Minimum Variance |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi SP 500 | Amundi Index vs. Amundi MSCI Europe |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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