Correlation Between Schroder Asian and Amundi MSCI

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

By analyzing existing cross correlation between Schroder Asian Alpha and Amundi MSCI UK, you can compare the effects of market volatilities on Schroder Asian and Amundi MSCI 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 Schroder Asian with a short position of Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroder Asian and Amundi MSCI.

Diversification Opportunities for Schroder Asian and Amundi MSCI

0.47

Correlation Coefficient

Schroder Asian  Amundi MSCI

Very weak diversification

The 3 months correlation between Schroder and Amundi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Schroder Asian Alpha and Amundi MSCI UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI UK and Schroder Asian 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 Schroder Asian Alpha are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI UK has no effect on the direction of Schroder Asian i.e., Schroder Asian and Amundi MSCI go up and down completely randomly.

Pair Corralation between Schroder Asian and Amundi MSCI

Assuming the 90 days trading horizon Schroder Asian Alpha is expected to generate 1.3 times more return on investment than Amundi MSCI. However, Schroder Asian is 1.3 times more volatile than Amundi MSCI UK. It trades about 0.0 of its potential returns per unit of risk. Amundi MSCI UK is currently generating about -0.08 per unit of risk. If you would invest  144.00  in Schroder Asian Alpha on September 30, 2024 and sell it today you would earn a total of  0.00  from holding Schroder Asian Alpha or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Schroder Asian Alpha  vs.  Amundi MSCI UK

Schroder Asian Alpha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schroder Asian Alpha has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Schroder Asian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Amundi MSCI UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi MSCI UK has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Amundi MSCI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Schroder Asian and Amundi MSCI

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

The idea behind Schroder Asian Alpha and Amundi MSCI UK 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.