Correlation Between Visa and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Amundi Index Solutions, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amundi Index.
Diversification Opportunities for Visa and Amundi Index
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Amundi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Amundi Index go up and down completely randomly.
Pair Corralation between Visa and Amundi Index
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.1 times more return on investment than Amundi Index. However, Visa is 1.1 times more volatile than Amundi Index Solutions. It trades about 0.1 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.05 per unit of risk. If you would invest 22,355 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 9,153 from holding Visa Class A or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.15% |
| Values | Daily Returns |
Visa Class A vs. Amundi Index Solutions
Performance |
| Timeline |
| Visa Class A |
| Amundi Index Solutions |
Visa and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amundi Index
The main advantage of trading using opposite Visa and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Amundi Index vs. UBS Fund Solutions | Amundi Index vs. Xtrackers Nikkei 225 | Amundi Index vs. iShares VII PLC | Amundi Index vs. Vanguard Funds Public |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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