Correlation Between Xtrackers MSCI and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI China and Amundi Index Solutions, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Amundi Index.
Diversification Opportunities for Xtrackers MSCI and Amundi Index
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Amundi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI China 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 Xtrackers MSCI 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 Xtrackers MSCI China 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 Xtrackers MSCI i.e., Xtrackers MSCI and Amundi Index go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Amundi Index
Assuming the 90 days trading horizon Xtrackers MSCI is expected to generate 4.56 times less return on investment than Amundi Index. In addition to that, Xtrackers MSCI is 2.32 times more volatile than Amundi Index Solutions. It trades about 0.02 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.17 per unit of volatility. If you would invest 11,440 in Amundi Index Solutions on August 31, 2024 and sell it today you would earn a total of 358.00 from holding Amundi Index Solutions or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI China vs. Amundi Index Solutions
Performance |
| Timeline |
| Xtrackers MSCI China |
| Amundi Index Solutions |
Xtrackers MSCI and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Amundi Index
The main advantage of trading using opposite Xtrackers MSCI and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares Core SP |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi MSCI Emerging |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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