Correlation Between Amundi EUR and Aberdeen New
Can any of the company-specific risk be diversified away by investing in both Amundi EUR and Aberdeen New 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 Amundi EUR and Aberdeen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi EUR High and Aberdeen New India, you can compare the effects of market volatilities on Amundi EUR and Aberdeen New 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 Amundi EUR with a short position of Aberdeen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi EUR and Aberdeen New.
Diversification Opportunities for Amundi EUR and Aberdeen New
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amundi and Aberdeen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and Aberdeen New India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen New India and Amundi EUR 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 Amundi EUR High are associated (or correlated) with Aberdeen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen New India has no effect on the direction of Amundi EUR i.e., Amundi EUR and Aberdeen New go up and down completely randomly.
Pair Corralation between Amundi EUR and Aberdeen New
Assuming the 90 days trading horizon Amundi EUR is expected to generate 42.17 times less return on investment than Aberdeen New. But when comparing it to its historical volatility, Amundi EUR High is 8.32 times less risky than Aberdeen New. It trades about 0.07 of its potential returns per unit of risk. Aberdeen New India is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 74,800 in Aberdeen New India on August 29, 2024 and sell it today you would earn a total of 6,400 from holding Aberdeen New India or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi EUR High vs. Aberdeen New India
Performance |
| Timeline |
| Amundi EUR High |
| Aberdeen New India |
Amundi EUR and Aberdeen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi EUR and Aberdeen New
The main advantage of trading using opposite Amundi EUR and Aberdeen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi EUR position performs unexpectedly, Aberdeen New 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 Aberdeen New will offset losses from the drop in Aberdeen New's long position.| Amundi EUR vs. Vanguard FTSE Developed | Amundi EUR vs. Leverage Shares 2x | Amundi EUR vs. Amundi Index Solutions | Amundi EUR vs. Amundi Index Solutions |
| Aberdeen New vs. iShares MSCI Japan | Aberdeen New vs. Amundi EUR High | Aberdeen New vs. iShares JP Morgan | Aberdeen New vs. Xtrackers 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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