Correlation Between Amundi Stoxx and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Amundi Stoxx 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 Stoxx 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 Stoxx Europe and Amundi Index Solutions, you can compare the effects of market volatilities on Amundi Stoxx 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 Stoxx with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Stoxx and Amundi Index.
Diversification Opportunities for Amundi Stoxx and Amundi Index
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amundi and Amundi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Stoxx Europe 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 Stoxx 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 Stoxx Europe 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 Stoxx i.e., Amundi Stoxx and Amundi Index go up and down completely randomly.
Pair Corralation between Amundi Stoxx and Amundi Index
Assuming the 90 days trading horizon Amundi Stoxx Europe is expected to generate 0.87 times more return on investment than Amundi Index. However, Amundi Stoxx Europe is 1.15 times less risky than Amundi Index. It trades about -0.03 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.13 per unit of risk. If you would invest 11,642 in Amundi Stoxx Europe on September 2, 2024 and sell it today you would lose (70.00) from holding Amundi Stoxx Europe or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Stoxx Europe vs. Amundi Index Solutions
Performance |
| Timeline |
| Amundi Stoxx Europe |
| Amundi Index Solutions |
Amundi Stoxx and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Stoxx and Amundi Index
The main advantage of trading using opposite Amundi Stoxx and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Stoxx 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 Stoxx vs. Amundi Index Solutions | Amundi Stoxx vs. Amundi Index Solutions | Amundi Stoxx vs. Amundi Index Solutions | Amundi Stoxx vs. Amundi Index Solutions |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi ETF PEA | Amundi Index vs. Amundi ETF PEA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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