Correlation Between Gold Bullion and Amundi Stoxx
Can any of the company-specific risk be diversified away by investing in both Gold Bullion and Amundi Stoxx 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 Stoxx 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 Stoxx Europe, you can compare the effects of market volatilities on Gold Bullion and Amundi Stoxx 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 Stoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and Amundi Stoxx.
Diversification Opportunities for Gold Bullion and Amundi Stoxx
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gold and Amundi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and Amundi Stoxx Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Stoxx Europe 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 Stoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Stoxx Europe has no effect on the direction of Gold Bullion i.e., Gold Bullion and Amundi Stoxx go up and down completely randomly.
Pair Corralation between Gold Bullion and Amundi Stoxx
Assuming the 90 days trading horizon Gold Bullion Securities is expected to generate 1.16 times more return on investment than Amundi Stoxx. However, Gold Bullion is 1.16 times more volatile than Amundi Stoxx Europe. It trades about 0.1 of its potential returns per unit of risk. Amundi Stoxx Europe is currently generating about 0.06 per unit of risk. If you would invest 15,764 in Gold Bullion Securities on September 3, 2024 and sell it today you would earn a total of 7,415 from holding Gold Bullion Securities or generate 47.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. Amundi Stoxx Europe
Performance |
| Timeline |
| Gold Bullion Securities |
| Amundi Stoxx Europe |
Gold Bullion and Amundi Stoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and Amundi Stoxx
The main advantage of trading using opposite Gold Bullion and Amundi Stoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion position performs unexpectedly, Amundi Stoxx 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 Stoxx will offset losses from the drop in Amundi Stoxx's long position.| Gold Bullion vs. Amundi Index Solutions | Gold Bullion vs. Manitou BF SA | Gold Bullion vs. Ossiam Minimum Variance | Gold Bullion vs. Granite 3x LVMH |
| Amundi Stoxx vs. Amundi Index Solutions | Amundi Stoxx vs. Manitou BF SA | Amundi Stoxx vs. Ossiam Minimum Variance | Amundi Stoxx vs. Granite 3x LVMH |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |