Correlation Between Visa and Amundi EUR
Can any of the company-specific risk be diversified away by investing in both Visa and Amundi EUR 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 EUR 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 EUR High, you can compare the effects of market volatilities on Visa and Amundi EUR 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 EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amundi EUR.
Diversification Opportunities for Visa and Amundi EUR
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Visa and Amundi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amundi EUR High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi EUR High 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 EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi EUR High has no effect on the direction of Visa i.e., Visa and Amundi EUR go up and down completely randomly.
Pair Corralation between Visa and Amundi EUR
Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Amundi EUR. In addition to that, Visa is 6.06 times more volatile than Amundi EUR High. It trades about -0.12 of its total potential returns per unit of risk. Amundi EUR High is currently generating about -0.43 per unit of volatility. If you would invest 10,548 in Amundi EUR High on October 14, 2024 and sell it today you would lose (66.00) from holding Amundi EUR High or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 47.37% |
| Values | Daily Returns |
Visa Class A vs. Amundi EUR High
Performance |
| Timeline |
| Visa Class A |
| Amundi EUR High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Amundi EUR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amundi EUR
The main advantage of trading using opposite Visa and Amundi EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amundi EUR 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 EUR will offset losses from the drop in Amundi EUR's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Amundi EUR vs. UBSFund Solutions MSCI | Amundi EUR vs. Vanguard SP 500 | Amundi EUR vs. iShares Core SP | Amundi EUR vs. iShares Core MSCI |
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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