Correlation Between LG Longer and Amundi EUR
Can any of the company-specific risk be diversified away by investing in both LG Longer and Amundi EUR 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 LG Longer and Amundi EUR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Longer Dated and Amundi EUR High, you can compare the effects of market volatilities on LG Longer and Amundi EUR 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 LG Longer with a short position of Amundi EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Longer and Amundi EUR.
Diversification Opportunities for LG Longer and Amundi EUR
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COMF and Amundi is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding LG Longer Dated and Amundi EUR High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi EUR High and LG Longer 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 LG Longer Dated are associated (or correlated) with Amundi EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi EUR High has no effect on the direction of LG Longer i.e., LG Longer and Amundi EUR go up and down completely randomly.
Pair Corralation between LG Longer and Amundi EUR
Assuming the 90 days trading horizon LG Longer Dated is expected to under-perform the Amundi EUR. In addition to that, LG Longer is 3.68 times more volatile than Amundi EUR High. It trades about -0.01 of its total potential returns per unit of risk. Amundi EUR High is currently generating about 0.17 per unit of volatility. If you would invest 10,283 in Amundi EUR High on September 3, 2024 and sell it today you would earn a total of 449.00 from holding Amundi EUR High or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Longer Dated vs. Amundi EUR High
Performance |
| Timeline |
| LG Longer Dated |
| Amundi EUR High |
LG Longer and Amundi EUR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Longer and Amundi EUR
The main advantage of trading using opposite LG Longer and Amundi EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Longer position performs unexpectedly, Amundi EUR 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 EUR will offset losses from the drop in Amundi EUR's long position.| LG Longer vs. iShares MSCI Japan | LG Longer vs. Amundi EUR High | LG Longer vs. iShares JP Morgan | LG Longer vs. Xtrackers MSCI |
| Amundi EUR vs. Amundi Index Solutions | Amundi EUR vs. Amundi MSCI Pacific | Amundi EUR vs. Amundi MSCI Europe | Amundi EUR vs. Amundi Index Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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