Correlation Between Amundi ETF and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Amundi ETF 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 Amundi ETF and Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on Amundi ETF 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 Amundi ETF with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi ETF and Amundi Index.
Diversification Opportunities for Amundi ETF and Amundi Index
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amundi and Amundi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amundi ETF PEA 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 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 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 Amundi ETF i.e., Amundi ETF and Amundi Index go up and down completely randomly.
Pair Corralation between Amundi ETF and Amundi Index
Assuming the 90 days trading horizon Amundi ETF is expected to generate 1.87 times less return on investment than Amundi Index. In addition to that, Amundi ETF is 1.34 times more volatile than Amundi Index Solutions. It trades about 0.09 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.23 per unit of volatility. If you would invest 54,596 in Amundi Index Solutions on August 28, 2024 and sell it today you would earn a total of 2,742 from holding Amundi Index Solutions or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi ETF PEA vs. Amundi Index Solutions
Performance |
| Timeline |
| Amundi ETF PEA |
| Amundi Index Solutions |
Amundi ETF and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi ETF and Amundi Index
The main advantage of trading using opposite Amundi ETF and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi ETF 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.| Amundi ETF vs. Amundi ETF PEA | Amundi ETF vs. Amundi ETF PEA | Amundi ETF vs. Amundi Index Solutions | Amundi ETF vs. Amundi ETF PEA |
| Amundi Index vs. Amundi ETF PEA | Amundi Index vs. Amundi ETF PEA | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi ETF PEA |
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.
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