Correlation Between Amundi CAC and BNPP EHY
Can any of the company-specific risk be diversified away by investing in both Amundi CAC and BNPP EHY 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 CAC and BNPP EHY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi CAC 40 and BNPP EHY SRI, you can compare the effects of market volatilities on Amundi CAC and BNPP EHY 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 CAC with a short position of BNPP EHY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi CAC and BNPP EHY.
Diversification Opportunities for Amundi CAC and BNPP EHY
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and BNPP is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amundi CAC 40 and BNPP EHY SRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNPP EHY SRI and Amundi CAC 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 CAC 40 are associated (or correlated) with BNPP EHY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNPP EHY SRI has no effect on the direction of Amundi CAC i.e., Amundi CAC and BNPP EHY go up and down completely randomly.
Pair Corralation between Amundi CAC and BNPP EHY
Assuming the 90 days trading horizon Amundi CAC 40 is expected to generate 5.1 times more return on investment than BNPP EHY. However, Amundi CAC is 5.1 times more volatile than BNPP EHY SRI. It trades about 0.2 of its potential returns per unit of risk. BNPP EHY SRI is currently generating about 0.38 per unit of risk. If you would invest 7,100 in Amundi CAC 40 on September 13, 2024 and sell it today you would earn a total of 198.00 from holding Amundi CAC 40 or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi CAC 40 vs. BNPP EHY SRI
Performance |
| Timeline |
| Amundi CAC 40 |
| BNPP EHY SRI |
Amundi CAC and BNPP EHY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi CAC and BNPP EHY
The main advantage of trading using opposite Amundi CAC and BNPP EHY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi CAC position performs unexpectedly, BNPP EHY 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 BNPP EHY will offset losses from the drop in BNPP EHY's long position.| Amundi CAC vs. Lyxor UCITS Japan | Amundi CAC vs. Lyxor UCITS Japan | Amundi CAC vs. Lyxor UCITS Stoxx | Amundi CAC vs. Gold Bullion Securities |
| BNPP EHY vs. Lyxor UCITS Japan | BNPP EHY vs. Lyxor UCITS Japan | BNPP EHY vs. Lyxor UCITS Stoxx | BNPP EHY vs. Amundi CAC 40 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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