Correlation Between Government Securities and Amundi Climate
Can any of the company-specific risk be diversified away by investing in both Government Securities and Amundi Climate 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 Government Securities and Amundi Climate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Government Securities Fund and Amundi Climate Transition, you can compare the effects of market volatilities on Government Securities and Amundi Climate 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 Government Securities with a short position of Amundi Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Government Securities and Amundi Climate.
Diversification Opportunities for Government Securities and Amundi Climate
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Government and Amundi is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Government Securities Fund and Amundi Climate Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Climate Transition and Government Securities 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 Government Securities Fund are associated (or correlated) with Amundi Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Climate Transition has no effect on the direction of Government Securities i.e., Government Securities and Amundi Climate go up and down completely randomly.
Pair Corralation between Government Securities and Amundi Climate
Assuming the 90 days horizon Government Securities is expected to generate 1.15 times less return on investment than Amundi Climate. But when comparing it to its historical volatility, Government Securities Fund is 1.28 times less risky than Amundi Climate. It trades about 0.11 of its potential returns per unit of risk. Amundi Climate Transition is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 977.00 in Amundi Climate Transition on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Amundi Climate Transition or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Government Securities Fund vs. Amundi Climate Transition
Performance |
| Timeline |
| Government Securities |
| Amundi Climate Transition |
Government Securities and Amundi Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Government Securities and Amundi Climate
The main advantage of trading using opposite Government Securities and Amundi Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Government Securities position performs unexpectedly, Amundi Climate 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 Climate will offset losses from the drop in Amundi Climate's long position.| Government Securities vs. Capital Growth Fund | Government Securities vs. High Income Fund | Government Securities vs. International Fund International | Government Securities vs. Growth Income Fund |
| Amundi Climate vs. Pioneer Fundamental Growth | Amundi Climate vs. Pioneer Global Equity | Amundi Climate vs. Pioneer Disciplined Value | Amundi Climate vs. Pioneer Disciplined Value |
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 CEOs Directory module to screen CEOs from public companies around the world.
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