Correlation Between Amundi Obligataire and Volkswagen

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

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

Diversification Opportunities for Amundi Obligataire and Volkswagen

0.12

Correlation Coefficient

Amundi Obligataire  Volkswagen

Average diversification

The 3 months correlation between Amundi and Volkswagen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Obligataire Diversifi and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and Amundi Obligataire 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 Obligataire Diversifi are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Amundi Obligataire i.e., Amundi Obligataire and Volkswagen go up and down completely randomly.

Pair Corralation between Amundi Obligataire and Volkswagen

Assuming the 90 days trading horizon Amundi Obligataire Diversifi is expected to under-perform the Volkswagen. But the fund apears to be less risky and, when comparing its historical volatility, Amundi Obligataire Diversifi is 10.03 times less risky than Volkswagen. The fund trades about 0.0 of its potential returns per unit of risk. The Volkswagen AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  9,150  in Volkswagen AG on December 26, 2024 and sell it today you would earn a total of  1,400  from holding Volkswagen AG or generate 15.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Amundi Obligataire Diversifi  vs.  Volkswagen AG

Amundi Obligataire

Risk-Adjusted Performance

Very Weak

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

Volkswagen AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Volkswagen AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Volkswagen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Obligataire and Volkswagen

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

The idea behind Amundi Obligataire Diversifi and Volkswagen AG 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.

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.