Correlation Between Amundi ETF and Lyxor CAC
Can any of the company-specific risk be diversified away by investing in both Amundi ETF and Lyxor CAC 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 ETF and Lyxor CAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi ETF PEA and Lyxor CAC 40, you can compare the effects of market volatilities on Amundi ETF and Lyxor CAC 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 ETF with a short position of Lyxor CAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi ETF and Lyxor CAC.
Diversification Opportunities for Amundi ETF and Lyxor CAC
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amundi and Lyxor is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amundi ETF PEA and Lyxor CAC 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor CAC 40 and Amundi ETF 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 ETF PEA are associated (or correlated) with Lyxor CAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor CAC 40 has no effect on the direction of Amundi ETF i.e., Amundi ETF and Lyxor CAC go up and down completely randomly.
Pair Corralation between Amundi ETF and Lyxor CAC
Assuming the 90 days trading horizon Amundi ETF PEA is expected to under-perform the Lyxor CAC. In addition to that, Amundi ETF is 1.55 times more volatile than Lyxor CAC 40. It trades about -0.01 of its total potential returns per unit of risk. Lyxor CAC 40 is currently generating about 0.36 per unit of volatility. If you would invest 3,557 in Lyxor CAC 40 on November 3, 2024 and sell it today you would earn a total of 255.00 from holding Lyxor CAC 40 or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi ETF PEA vs. Lyxor CAC 40
Performance |
| Timeline |
| Amundi ETF PEA |
| Lyxor CAC 40 |
Amundi ETF and Lyxor CAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi ETF and Lyxor CAC
The main advantage of trading using opposite Amundi ETF and Lyxor CAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi ETF position performs unexpectedly, Lyxor CAC 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 Lyxor CAC will offset losses from the drop in Lyxor CAC's long position.| Amundi ETF vs. Amundi ETF PEA | Amundi ETF vs. Amundi ETF PEA | Amundi ETF vs. Amundi Index Solutions | Amundi ETF vs. Amundi ETF PEA |
| Lyxor CAC vs. Amundi Index Solutions | Lyxor CAC vs. Amundi ETF PEA | Lyxor CAC vs. Amundi ETF PEA | Lyxor CAC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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