Correlation Between Amundi EUR and Downing Strategic
Can any of the company-specific risk be diversified away by investing in both Amundi EUR and Downing Strategic 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 Downing Strategic 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 Downing Strategic Micro Cap, you can compare the effects of market volatilities on Amundi EUR and Downing Strategic 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 Downing Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi EUR and Downing Strategic.
Diversification Opportunities for Amundi EUR and Downing Strategic
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and Downing is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and Downing Strategic Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Downing Strategic Micro 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 Downing Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Downing Strategic Micro has no effect on the direction of Amundi EUR i.e., Amundi EUR and Downing Strategic go up and down completely randomly.
Pair Corralation between Amundi EUR and Downing Strategic
Assuming the 90 days trading horizon Amundi EUR High is expected to generate 0.03 times more return on investment than Downing Strategic. However, Amundi EUR High is 32.81 times less risky than Downing Strategic. It trades about 0.16 of its potential returns per unit of risk. Downing Strategic Micro Cap is currently generating about -0.03 per unit of risk. If you would invest 10,128 in Amundi EUR High on September 1, 2024 and sell it today you would earn a total of 604.00 from holding Amundi EUR High or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi EUR High vs. Downing Strategic Micro Cap
Performance |
| Timeline |
| Amundi EUR High |
| Downing Strategic Micro |
Amundi EUR and Downing Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi EUR and Downing Strategic
The main advantage of trading using opposite Amundi EUR and Downing Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi EUR position performs unexpectedly, Downing Strategic 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 Downing Strategic will offset losses from the drop in Downing Strategic's long position.| Amundi EUR vs. iShares Treasury Bond | Amundi EUR vs. VanEck Crypto Blockchain | Amundi EUR vs. Invesco Solar Energy | Amundi EUR vs. Neometals |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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