Correlation Between Amundi CAC and Lyxor Index
Can any of the company-specific risk be diversified away by investing in both Amundi CAC and Lyxor 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 CAC and Lyxor Index 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 Lyxor Index Fund, you can compare the effects of market volatilities on Amundi CAC and Lyxor 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 CAC with a short position of Lyxor Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi CAC and Lyxor Index.
Diversification Opportunities for Amundi CAC and Lyxor Index
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amundi and Lyxor is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amundi CAC 40 and Lyxor Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Index Fund 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 Lyxor Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Index Fund has no effect on the direction of Amundi CAC i.e., Amundi CAC and Lyxor Index go up and down completely randomly.
Pair Corralation between Amundi CAC and Lyxor Index
Assuming the 90 days trading horizon Amundi CAC is expected to generate 1.54 times less return on investment than Lyxor Index. In addition to that, Amundi CAC is 1.06 times more volatile than Lyxor Index Fund. It trades about 0.04 of its total potential returns per unit of risk. Lyxor Index Fund is currently generating about 0.07 per unit of volatility. If you would invest 10,185 in Lyxor Index Fund on September 5, 2024 and sell it today you would earn a total of 3,103 from holding Lyxor Index Fund or generate 30.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amundi CAC 40 vs. Lyxor Index Fund
Performance |
| Timeline |
| Amundi CAC 40 |
| Lyxor Index Fund |
Amundi CAC and Lyxor Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi CAC and Lyxor Index
The main advantage of trading using opposite Amundi CAC and Lyxor Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi CAC position performs unexpectedly, Lyxor 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 Lyxor Index will offset losses from the drop in Lyxor Index's long position.| Amundi CAC vs. Deutsche Telekom AG | Amundi CAC vs. Volkswagen AG | Amundi CAC vs. Bayerische Motoren Werke | Amundi CAC vs. Mnchener Rck AG |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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