Correlation Between Swiss Leader and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Swiss Leader 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 Swiss Leader and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and Amundi Index Solutions, you can compare the effects of market volatilities on Swiss Leader 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 Swiss Leader with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and Amundi Index.
Diversification Opportunities for Swiss Leader and Amundi Index
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Swiss and Amundi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price 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 Swiss Leader 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 Swiss Leader Price 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 Swiss Leader i.e., Swiss Leader and Amundi Index go up and down completely randomly.
Pair Corralation between Swiss Leader and Amundi Index
Assuming the 90 days trading horizon Swiss Leader is expected to generate 1.46 times less return on investment than Amundi Index. But when comparing it to its historical volatility, Swiss Leader Price is 1.26 times less risky than Amundi Index. It trades about 0.07 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,591 in Amundi Index Solutions on September 2, 2024 and sell it today you would earn a total of 1,010 from holding Amundi Index Solutions or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Swiss Leader Price vs. Amundi Index Solutions
Performance |
| Timeline |
Swiss Leader and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
Amundi Index Solutions
Pair trading matchups for Amundi Index
Pair Trading with Swiss Leader and Amundi Index
The main advantage of trading using opposite Swiss Leader and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader 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.| Swiss Leader vs. Metall Zug AG | Swiss Leader vs. Berner Kantonalbank AG | Swiss Leader vs. mobilezone ag | Swiss Leader vs. Luzerner Kantonalbank AG |
| Amundi Index vs. UBSFund Solutions MSCI | Amundi Index vs. Vanguard SP 500 | Amundi Index vs. iShares VII PLC | Amundi Index vs. iShares Core SP |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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