Correlation Between Vanguard and Amundi EUR
Can any of the company-specific risk be diversified away by investing in both Vanguard 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 Vanguard and Amundi EUR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and Amundi EUR High, you can compare the effects of market volatilities on Vanguard 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 Vanguard with a short position of Amundi EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Amundi EUR.
Diversification Opportunities for Vanguard and Amundi EUR
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Amundi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 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 Vanguard 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 Vanguard SP 500 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 Vanguard i.e., Vanguard and Amundi EUR go up and down completely randomly.
Pair Corralation between Vanguard and Amundi EUR
Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 4.6 times more return on investment than Amundi EUR. However, Vanguard is 4.6 times more volatile than Amundi EUR High. It trades about -0.09 of its potential returns per unit of risk. Amundi EUR High is currently generating about -0.43 per unit of risk. If you would invest 10,234 in Vanguard SP 500 on October 14, 2024 and sell it today you would lose (114.00) from holding Vanguard SP 500 or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 56.25% |
| Values | Daily Returns |
Vanguard SP 500 vs. Amundi EUR High
Performance |
| Timeline |
| Vanguard SP 500 |
| Amundi EUR High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard and Amundi EUR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and Amundi EUR
The main advantage of trading using opposite Vanguard and Amundi EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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.| Vanguard vs. Vanguard FTSE Emerging | Vanguard vs. Vanguard USD Emerging | Vanguard vs. Vanguard FTSE Developed | Vanguard vs. Vanguard FTSE Japan |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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