Correlation Between Amundi Actions and Xtrackers ShortDAX

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

By analyzing existing cross correlation between Amundi Actions Internationales and Xtrackers ShortDAX, you can compare the effects of market volatilities on Amundi Actions and Xtrackers ShortDAX 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 Actions with a short position of Xtrackers ShortDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Actions and Xtrackers ShortDAX.

Diversification Opportunities for Amundi Actions and Xtrackers ShortDAX

-0.61

Correlation Coefficient

Amundi Actions  Xtrackers ShortDAX

Excellent diversification

The 3 months correlation between Amundi and Xtrackers is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Actions Internationales and Xtrackers ShortDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers ShortDAX and Amundi Actions 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 Actions Internationales are associated (or correlated) with Xtrackers ShortDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers ShortDAX has no effect on the direction of Amundi Actions i.e., Amundi Actions and Xtrackers ShortDAX go up and down completely randomly.

Pair Corralation between Amundi Actions and Xtrackers ShortDAX

Assuming the 90 days trading horizon Amundi Actions Internationales is expected to generate 0.42 times more return on investment than Xtrackers ShortDAX. However, Amundi Actions Internationales is 2.39 times less risky than Xtrackers ShortDAX. It trades about 0.1 of its potential returns per unit of risk. Xtrackers ShortDAX is currently generating about -0.05 per unit of risk. If you would invest  2,406  in Amundi Actions Internationales on October 4, 2024 and sell it today you would earn a total of  868.00  from holding Amundi Actions Internationales or generate 36.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Amundi Actions Internationales  vs.  Xtrackers ShortDAX

Amundi Actions Inter

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Actions Internationales are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile basic indicators, Amundi Actions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Xtrackers ShortDAX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xtrackers ShortDAX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amundi Actions and Xtrackers ShortDAX

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

The idea behind Amundi Actions Internationales and Xtrackers ShortDAX 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.