Correlation Between Gold Bullion and Amundi German
Can any of the company-specific risk be diversified away by investing in both Gold Bullion and Amundi German 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 German 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 German Bund, you can compare the effects of market volatilities on Gold Bullion and Amundi German 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 German. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and Amundi German.
Diversification Opportunities for Gold Bullion and Amundi German
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Amundi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and Amundi German Bund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi German Bund 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 German. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi German Bund has no effect on the direction of Gold Bullion i.e., Gold Bullion and Amundi German go up and down completely randomly.
Pair Corralation between Gold Bullion and Amundi German
Assuming the 90 days trading horizon Gold Bullion Securities is expected to generate 1.91 times more return on investment than Amundi German. However, Gold Bullion is 1.91 times more volatile than Amundi German Bund. It trades about 0.15 of its potential returns per unit of risk. Amundi German Bund is currently generating about 0.03 per unit of risk. If you would invest 17,460 in Gold Bullion Securities on August 27, 2024 and sell it today you would earn a total of 6,443 from holding Gold Bullion Securities or generate 36.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. Amundi German Bund
Performance |
| Timeline |
| Gold Bullion Securities |
| Amundi German Bund |
Gold Bullion and Amundi German Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and Amundi German
The main advantage of trading using opposite Gold Bullion and Amundi German positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion position performs unexpectedly, Amundi German 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 German will offset losses from the drop in Amundi German's long position.| Gold Bullion vs. Lyxor UCITS Japan | Gold Bullion vs. Lyxor UCITS Stoxx | Gold Bullion vs. Xtrackers MSCI Europe | Gold Bullion vs. SPDR SP 500 |
| Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi SP 500 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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