Correlation Between Amundi Convictions and R Co

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

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

Diversification Opportunities for Amundi Convictions and R Co

0.68

Correlation Coefficient

Amundi Convictions  R Co

Poor diversification

The 3 months correlation between Amundi and 0P00017SX2 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Convictions ESR and R co Valor F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R co Valor and Amundi Convictions 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 Convictions ESR are associated (or correlated) with R Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R co Valor has no effect on the direction of Amundi Convictions i.e., Amundi Convictions and R Co go up and down completely randomly.

Pair Corralation between Amundi Convictions and R Co

Assuming the 90 days trading horizon Amundi Convictions ESR is expected to generate 0.95 times more return on investment than R Co. However, Amundi Convictions ESR is 1.05 times less risky than R Co. It trades about 0.03 of its potential returns per unit of risk. R co Valor F is currently generating about -0.23 per unit of risk. If you would invest  19,464  in Amundi Convictions ESR on October 5, 2024 and sell it today you would earn a total of  38.00  from holding Amundi Convictions ESR or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.12%
Values	Daily Returns

Amundi Convictions ESR  vs.  R co Valor F

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.

R co Valor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days R co Valor F has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, R Co 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 Convictions and R Co

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

The idea behind Amundi Convictions ESR and R co Valor F 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.