Correlation Between Amundi MSCI and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Amundi MSCI and Dow Jones 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 MSCI and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi MSCI Emerging and Dow Jones Industrial, you can compare the effects of market volatilities on Amundi MSCI and Dow Jones 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 MSCI with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi MSCI and Dow Jones.
Diversification Opportunities for Amundi MSCI and Dow Jones
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amundi and Dow is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI Emerging and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Amundi MSCI 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 MSCI Emerging are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Amundi MSCI i.e., Amundi MSCI and Dow Jones go up and down completely randomly.
Pair Corralation between Amundi MSCI and Dow Jones
Assuming the 90 days trading horizon Amundi MSCI Emerging is expected to under-perform the Dow Jones. But the etf apears to be less risky and, when comparing its historical volatility, Amundi MSCI Emerging is 1.38 times less risky than Dow Jones. The etf trades about -0.15 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amundi MSCI Emerging vs. Dow Jones Industrial
Performance |
| Timeline |
Amundi MSCI and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Amundi MSCI Emerging
Pair trading matchups for Amundi MSCI
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Amundi MSCI and Dow Jones
The main advantage of trading using opposite Amundi MSCI and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi MSCI position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.The idea behind Amundi MSCI Emerging and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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