Correlation Between CM AM and Amundi Actions

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

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

Diversification Opportunities for CM AM and Amundi Actions

0.88

Correlation Coefficient

CM AM  Amundi Actions

Very poor diversification

The 3 months correlation between 0P0001F96C and Amundi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE and Amundi Actions Internationales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Actions Inter and CM AM 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 CM AM Monplus NE are associated (or correlated) with Amundi Actions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Actions Inter has no effect on the direction of CM AM i.e., CM AM and Amundi Actions go up and down completely randomly.

Pair Corralation between CM AM and Amundi Actions

Assuming the 90 days trading horizon CM AM Monplus NE is expected to generate 0.02 times more return on investment than Amundi Actions. However, CM AM Monplus NE is 59.56 times less risky than Amundi Actions. It trades about 1.16 of its potential returns per unit of risk. Amundi Actions Internationales is currently generating about -0.2 per unit of risk. If you would invest  10,612  in CM AM Monplus NE on October 5, 2024 and sell it today you would earn a total of  24.00  from holding CM AM Monplus NE or generate 0.23% return on investment over 90 days.

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

CM AM Monplus NE  vs.  Amundi Actions Internationales

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.

Amundi Actions Inter

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with CM AM and Amundi Actions

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

The idea behind CM AM Monplus NE and Amundi Actions Internationales 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.