Correlation Between Amundi Label and Amundi Convictions

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

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

Diversification Opportunities for Amundi Label and Amundi Convictions

0.37

Correlation Coefficient

Amundi Label  Amundi Convictions

Weak diversification

The 3 months correlation between Amundi and Amundi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Label Equilibre 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 Amundi Label 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 Label Equilibre 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 Amundi Label i.e., Amundi Label and Amundi Convictions go up and down completely randomly.

Pair Corralation between Amundi Label and Amundi Convictions

Assuming the 90 days trading horizon Amundi Label Equilibre is expected to under-perform the Amundi Convictions. But the fund apears to be less risky and, when comparing its historical volatility, Amundi Label Equilibre is 1.74 times less risky than Amundi Convictions. The fund trades about -0.02 of its potential returns per unit of risk. The Amundi Convictions ESR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  19,155  in Amundi Convictions ESR on October 5, 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 Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Amundi Label Equilibre  vs.  Amundi Convictions ESR

Amundi Label Equilibre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Label Equilibre has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Amundi Label is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Amundi Label and Amundi Convictions

The main advantage of trading using opposite Amundi Label and Amundi Convictions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Label 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 Amundi Label Equilibre 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.