Correlation Between Amundi FTSE and Invesco Markets
Can any of the company-specific risk be diversified away by investing in both Amundi FTSE and Invesco Markets 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 Amundi FTSE and Invesco Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi FTSE EPRANAREIT and Invesco Markets III, you can compare the effects of market volatilities on Amundi FTSE and Invesco Markets 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 Amundi FTSE with a short position of Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi FTSE and Invesco Markets.
Diversification Opportunities for Amundi FTSE and Invesco Markets
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and Invesco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amundi FTSE EPRANAREIT and Invesco Markets III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets III and Amundi FTSE 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 Amundi FTSE EPRANAREIT are associated (or correlated) with Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets III has no effect on the direction of Amundi FTSE i.e., Amundi FTSE and Invesco Markets go up and down completely randomly.
Pair Corralation between Amundi FTSE and Invesco Markets
Assuming the 90 days trading horizon Amundi FTSE EPRANAREIT is expected to generate 3.66 times more return on investment than Invesco Markets. However, Amundi FTSE is 3.66 times more volatile than Invesco Markets III. It trades about 0.18 of its potential returns per unit of risk. Invesco Markets III is currently generating about 0.06 per unit of risk. If you would invest 3,995 in Amundi FTSE EPRANAREIT on October 20, 2024 and sell it today you would earn a total of 134.00 from holding Amundi FTSE EPRANAREIT or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi FTSE EPRANAREIT vs. Invesco Markets III
Performance |
| Timeline |
| Amundi FTSE EPRANAREIT |
| Invesco Markets III |
Amundi FTSE and Invesco Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi FTSE and Invesco Markets
The main advantage of trading using opposite Amundi FTSE and Invesco Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi FTSE position performs unexpectedly, Invesco Markets 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 Invesco Markets will offset losses from the drop in Invesco Markets' long position.| Amundi FTSE vs. Lyxor UCITS Japan | Amundi FTSE vs. Lyxor UCITS Japan | Amundi FTSE vs. Lyxor UCITS Stoxx | Amundi FTSE vs. Amundi CAC 40 |
| Invesco Markets vs. Lyxor UCITS Japan | Invesco Markets vs. Lyxor UCITS Japan | Invesco Markets vs. Lyxor UCITS Stoxx | Invesco Markets vs. Amundi CAC 40 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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