Correlation Between Amundi EUR and Amundi MSCI
Can any of the company-specific risk be diversified away by investing in both Amundi EUR and Amundi MSCI 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 Amundi MSCI 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 Amundi MSCI USA, you can compare the effects of market volatilities on Amundi EUR and Amundi MSCI 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 Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi EUR and Amundi MSCI.
Diversification Opportunities for Amundi EUR and Amundi MSCI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amundi and Amundi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and Amundi MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI USA 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 Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI USA has no effect on the direction of Amundi EUR i.e., Amundi EUR and Amundi MSCI go up and down completely randomly.
Pair Corralation between Amundi EUR and Amundi MSCI
Assuming the 90 days trading horizon Amundi EUR is expected to generate 3.15 times less return on investment than Amundi MSCI. But when comparing it to its historical volatility, Amundi EUR High is 4.07 times less risky than Amundi MSCI. It trades about 0.18 of its potential returns per unit of risk. Amundi MSCI USA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 66,659 in Amundi MSCI USA on August 30, 2024 and sell it today you would earn a total of 9,475 from holding Amundi MSCI USA or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi EUR High vs. Amundi MSCI USA
Performance |
| Timeline |
| Amundi EUR High |
| Amundi MSCI USA |
Amundi EUR and Amundi MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi EUR and Amundi MSCI
The main advantage of trading using opposite Amundi EUR and Amundi MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi EUR position performs unexpectedly, Amundi MSCI 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 MSCI will offset losses from the drop in Amundi MSCI'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 |
| Amundi MSCI vs. Vanguard FTSE Developed | Amundi MSCI vs. Leverage Shares 2x | Amundi MSCI vs. Amundi Index Solutions | Amundi MSCI vs. Amundi Index Solutions |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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