Correlation Between GM and Amundi Index
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Amundi Index Solutions, you can compare the effects of market volatilities on GM 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 GM with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Amundi Index.
Diversification Opportunities for GM and Amundi Index
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Amundi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Motors 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 GM 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 General Motors 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 GM i.e., GM and Amundi Index go up and down completely randomly.
Pair Corralation between GM and Amundi Index
Allowing for the 90-day total investment horizon GM is expected to generate 1.38 times less return on investment than Amundi Index. In addition to that, GM is 2.48 times more volatile than Amundi Index Solutions. It trades about 0.07 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.25 per unit of volatility. If you would invest 10,566 in Amundi Index Solutions on August 29, 2024 and sell it today you would earn a total of 693.00 from holding Amundi Index Solutions or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Amundi Index Solutions
Performance |
| Timeline |
| General Motors |
| Amundi Index Solutions |
GM and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Amundi Index
The main advantage of trading using opposite GM and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Amundi Index Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |