Correlation Between Euronext and Amundi SA
Can any of the company-specific risk be diversified away by investing in both Euronext and Amundi SA 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 Euronext and Amundi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euronext NV and Amundi SA, you can compare the effects of market volatilities on Euronext and Amundi SA 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 Euronext with a short position of Amundi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronext and Amundi SA.
Diversification Opportunities for Euronext and Amundi SA
Weak diversification
The 3 months correlation between Euronext and Amundi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Euronext NV and Amundi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SA and Euronext 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 Euronext NV are associated (or correlated) with Amundi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SA has no effect on the direction of Euronext i.e., Euronext and Amundi SA go up and down completely randomly.
Pair Corralation between Euronext and Amundi SA
Assuming the 90 days trading horizon Euronext NV is expected to generate 0.86 times more return on investment than Amundi SA. However, Euronext NV is 1.16 times less risky than Amundi SA. It trades about 0.08 of its potential returns per unit of risk. Amundi SA is currently generating about 0.05 per unit of risk. If you would invest 6,752 in Euronext NV on August 28, 2024 and sell it today you would earn a total of 3,888 from holding Euronext NV or generate 57.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euronext NV vs. Amundi SA
Performance |
| Timeline |
| Euronext NV |
| Amundi SA |
Euronext and Amundi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euronext and Amundi SA
The main advantage of trading using opposite Euronext and Amundi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronext position performs unexpectedly, Amundi SA 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 SA will offset losses from the drop in Amundi SA's long position.| Euronext vs. Caisse rgionale de | Euronext vs. Caisse Regionale de | Euronext vs. Manitou BF SA | Euronext vs. Ossiam Minimum Variance |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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