Correlation Between Renaissance Europe and Amundi Convictions

Can any of the company-specific risk be diversified away by investing in both Renaissance Europe and Amundi Convictions 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 Renaissance Europe and Amundi Convictions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Renaissance Europe C and Amundi Convictions ESR, you can compare the effects of market volatilities on Renaissance Europe and Amundi Convictions 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 Renaissance Europe with a short position of Amundi Convictions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renaissance Europe and Amundi Convictions.

Diversification Opportunities for Renaissance Europe and Amundi Convictions

-0.17

Correlation Coefficient

Renaissance Europe  Amundi Convictions

Good diversification

The 3 months correlation between Renaissance and Amundi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Renaissance Europe C and Amundi Convictions ESR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Convictions ESR and Renaissance Europe 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 Renaissance Europe C are associated (or correlated) with Amundi Convictions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Convictions ESR has no effect on the direction of Renaissance Europe i.e., Renaissance Europe and Amundi Convictions go up and down completely randomly.

Pair Corralation between Renaissance Europe and Amundi Convictions

Assuming the 90 days trading horizon Renaissance Europe C is expected to under-perform the Amundi Convictions. In addition to that, Renaissance Europe is 1.41 times more volatile than Amundi Convictions ESR. It trades about -0.1 of its total potential returns per unit of risk. Amundi Convictions ESR is currently generating about 0.06 per unit of volatility. If you would invest  19,155  in Amundi Convictions ESR on October 6, 2024 and sell it today you would earn a total of  347.00  from holding Amundi Convictions ESR or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Renaissance Europe C  vs.  Amundi Convictions ESR

Renaissance Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Renaissance Europe C has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Renaissance Europe is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Amundi Convictions ESR

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Amundi Convictions ESR has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Amundi Convictions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Renaissance Europe and Amundi Convictions

The main advantage of trading using opposite Renaissance Europe and Amundi Convictions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renaissance Europe position performs unexpectedly, Amundi Convictions 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 Convictions will offset losses from the drop in Amundi Convictions' long position.

The idea behind Renaissance Europe C and Amundi Convictions ESR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.