Correlation Between Gold Bullion and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Gold Bullion 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 Gold Bullion and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Bullion Securities and Amundi Index Solutions, you can compare the effects of market volatilities on Gold Bullion 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 Gold Bullion with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and Amundi Index.
Diversification Opportunities for Gold Bullion and Amundi Index
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gold and Amundi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities 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 Gold Bullion 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 Gold Bullion Securities 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 Gold Bullion i.e., Gold Bullion and Amundi Index go up and down completely randomly.
Pair Corralation between Gold Bullion and Amundi Index
Assuming the 90 days trading horizon Gold Bullion is expected to generate 1.19 times less return on investment than Amundi Index. But when comparing it to its historical volatility, Gold Bullion Securities is 1.28 times less risky than Amundi Index. It trades about 0.11 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,346 in Amundi Index Solutions on August 31, 2024 and sell it today you would earn a total of 7,384 from holding Amundi Index Solutions or generate 45.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. Amundi Index Solutions
Performance |
| Timeline |
| Gold Bullion Securities |
| Amundi Index Solutions |
Gold Bullion and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and Amundi Index
The main advantage of trading using opposite Gold Bullion and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion 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.| Gold Bullion vs. Amundi Index Solutions | Gold Bullion vs. Multi Units Luxembourg | Gold Bullion vs. iShares Digital Entertainment | Gold Bullion vs. Amundi Index Solutions |
| Amundi Index vs. Multi Units France | Amundi Index vs. Lyxor MSCI China | Amundi Index vs. Lyxor Commodities RefinitivCoreCommodity | Amundi Index vs. Manitou BF SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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