Correlation Between Amundi MSCI and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Amundi MSCI 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 MSCI 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 MSCI China and Amundi Index Solutions, you can compare the effects of market volatilities on Amundi MSCI 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 MSCI with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi MSCI and Amundi Index.
Diversification Opportunities for Amundi MSCI and Amundi Index
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amundi and Amundi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI China 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 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 China 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 MSCI i.e., Amundi MSCI and Amundi Index go up and down completely randomly.
Pair Corralation between Amundi MSCI and Amundi Index
Assuming the 90 days trading horizon Amundi MSCI China is expected to generate 1.62 times more return on investment than Amundi Index. However, Amundi MSCI is 1.62 times more volatile than Amundi Index Solutions. It trades about -0.12 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.25 per unit of risk. If you would invest 254,325 in Amundi MSCI China on August 27, 2024 and sell it today you would lose (11,425) from holding Amundi MSCI China or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi MSCI China vs. Amundi Index Solutions
Performance |
| Timeline |
| Amundi MSCI China |
| Amundi Index Solutions |
Amundi MSCI and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi MSCI and Amundi Index
The main advantage of trading using opposite Amundi MSCI and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi MSCI 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 MSCI vs. Leverage Shares 3x | Amundi MSCI vs. WisdomTree SP 500 | Amundi MSCI vs. WisdomTree Silver 3x | Amundi MSCI vs. Leverage Shares 3x |
| Amundi Index vs. Leverage Shares 3x | Amundi Index vs. Leverage Shares 3x | Amundi Index vs. Leverage Shares 3x | Amundi Index vs. WisdomTree Short GBP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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