Correlation Between Multi Units and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Multi Units 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 Multi Units and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units France and Amundi Index Solutions, you can compare the effects of market volatilities on Multi Units 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 Multi Units with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Amundi Index.
Diversification Opportunities for Multi Units and Amundi Index
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Amundi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France 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 Multi Units 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 Multi Units France 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 Multi Units i.e., Multi Units and Amundi Index go up and down completely randomly.
Pair Corralation between Multi Units and Amundi Index
Assuming the 90 days trading horizon Multi Units is expected to generate 2.75 times less return on investment than Amundi Index. But when comparing it to its historical volatility, Multi Units France is 1.44 times less risky than Amundi Index. It trades about 0.09 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 20,010 in Amundi Index Solutions on September 13, 2024 and sell it today you would earn a total of 1,533 from holding Amundi Index Solutions or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units France vs. Amundi Index Solutions
Performance |
| Timeline |
| Multi Units France |
| Amundi Index Solutions |
Multi Units and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and Amundi Index
The main advantage of trading using opposite Multi Units and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units 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.| Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Stoxx | Multi Units vs. Amundi CAC 40 |
| Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Stoxx | Amundi Index vs. Amundi CAC 40 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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