Correlation Between IShares European and Amundi FTSE
Can any of the company-specific risk be diversified away by investing in both IShares European and Amundi FTSE 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 IShares European and Amundi FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares European Property and Amundi FTSE EPRANAREIT, you can compare the effects of market volatilities on IShares European and Amundi FTSE 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 IShares European with a short position of Amundi FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares European and Amundi FTSE.
Diversification Opportunities for IShares European and Amundi FTSE
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Amundi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding iShares European Property and Amundi FTSE EPRANAREIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi FTSE EPRANAREIT and IShares European 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 iShares European Property are associated (or correlated) with Amundi FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi FTSE EPRANAREIT has no effect on the direction of IShares European i.e., IShares European and Amundi FTSE go up and down completely randomly.
Pair Corralation between IShares European and Amundi FTSE
Assuming the 90 days trading horizon iShares European Property is expected to generate 1.0 times more return on investment than Amundi FTSE. However, iShares European Property is 1.0 times less risky than Amundi FTSE. It trades about 0.1 of its potential returns per unit of risk. Amundi FTSE EPRANAREIT is currently generating about -0.18 per unit of risk. If you would invest 2,701 in iShares European Property on September 14, 2024 and sell it today you would earn a total of 60.00 from holding iShares European Property or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares European Property vs. Amundi FTSE EPRANAREIT
Performance |
| Timeline |
| iShares European Property |
| Amundi FTSE EPRANAREIT |
IShares European and Amundi FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares European and Amundi FTSE
The main advantage of trading using opposite IShares European and Amundi FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares European position performs unexpectedly, Amundi FTSE 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 FTSE will offset losses from the drop in Amundi FTSE's long position.| IShares European vs. Baloise Holding AG | IShares European vs. 21Shares Polkadot ETP | IShares European vs. UBS ETF MSCI | IShares European vs. BB Biotech AG |
| Amundi FTSE vs. Baloise Holding AG | Amundi FTSE vs. 21Shares Polkadot ETP | Amundi FTSE vs. UBS ETF MSCI | Amundi FTSE vs. BB Biotech AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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