Correlation Between Leverage Shares and Amundi MSCI
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Amundi MSCI 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 Leverage Shares and Amundi MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Amundi MSCI Pacific, you can compare the effects of market volatilities on Leverage Shares and Amundi MSCI 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 Leverage Shares with a short position of Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Amundi MSCI.
Diversification Opportunities for Leverage Shares and Amundi MSCI
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leverage and Amundi is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Amundi MSCI Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI Pacific and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI Pacific has no effect on the direction of Leverage Shares i.e., Leverage Shares and Amundi MSCI go up and down completely randomly.
Pair Corralation between Leverage Shares and Amundi MSCI
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 6.87 times more return on investment than Amundi MSCI. However, Leverage Shares is 6.87 times more volatile than Amundi MSCI Pacific. It trades about 0.07 of its potential returns per unit of risk. Amundi MSCI Pacific is currently generating about 0.14 per unit of risk. If you would invest 5,252 in Leverage Shares 2x on October 20, 2024 and sell it today you would earn a total of 243.00 from holding Leverage Shares 2x or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 2x vs. Amundi MSCI Pacific
Performance |
| Timeline |
| Leverage Shares 2x |
| Amundi MSCI Pacific |
Leverage Shares and Amundi MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Amundi MSCI
The main advantage of trading using opposite Leverage Shares and Amundi MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Amundi MSCI 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 MSCI will offset losses from the drop in Amundi MSCI's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Amundi MSCI vs. Amundi EUR High | Amundi MSCI vs. Amundi Index Solutions | Amundi MSCI vs. Amundi MSCI Europe | Amundi MSCI 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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