Correlation Between Amundi 3 and CM AM

Can any of the company-specific risk be diversified away by investing in both Amundi 3 and CM AM 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 3 and CM AM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amundi 3 Mois and CM AM Monplus NE, you can compare the effects of market volatilities on Amundi 3 and CM AM 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 3 with a short position of CM AM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi 3 and CM AM.

Diversification Opportunities for Amundi 3 and CM AM

1.0

Correlation Coefficient

Amundi 3  CM AM

No risk reduction

The 3 months correlation between Amundi and 0P0001F96C is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Amundi 3 Mois and CM AM Monplus NE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM AM Monplus and Amundi 3 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 3 Mois are associated (or correlated) with CM AM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM AM Monplus has no effect on the direction of Amundi 3 i.e., Amundi 3 and CM AM go up and down completely randomly.

Pair Corralation between Amundi 3 and CM AM

Assuming the 90 days trading horizon Amundi 3 is expected to generate 1.04 times less return on investment than CM AM. But when comparing it to its historical volatility, Amundi 3 Mois is 1.02 times less risky than CM AM. It trades about 1.4 of its potential returns per unit of risk. CM AM Monplus NE is currently generating about 1.43 of returns per unit of risk over similar time horizon. If you would invest  9,906  in CM AM Monplus NE on October 5, 2024 and sell it today you would earn a total of  730.00  from holding CM AM Monplus NE or generate 7.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Amundi 3 Mois  vs.  CM AM Monplus NE

Amundi 3 Mois

Risk-Adjusted Performance

0 of 100

Market Crasher

Over the last 90 days Amundi 3 Mois has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Amundi 3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CM AM Monplus

Risk-Adjusted Performance

0 of 100

Market Crasher

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

Pair Trading with Amundi 3 and CM AM

The main advantage of trading using opposite Amundi 3 and CM AM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi 3 position performs unexpectedly, CM AM 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 CM AM will offset losses from the drop in CM AM's long position.

The idea behind Amundi 3 Mois and CM AM Monplus NE 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.