Correlation Between CM AM and Amundi 3

Can any of the company-specific risk be diversified away by investing in both CM AM and Amundi 3 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 3 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 3 Mois, you can compare the effects of market volatilities on CM AM and Amundi 3 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 3. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM AM and Amundi 3.

Diversification Opportunities for CM AM and Amundi 3

1.0

Correlation Coefficient

CM AM  Amundi 3

No risk reduction

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

Pair Corralation between CM AM and Amundi 3

Assuming the 90 days trading horizon CM AM Monplus NE is expected to generate 1.25 times more return on investment than Amundi 3. However, CM AM is 1.25 times more volatile than Amundi 3 Mois. It trades about 1.16 of its potential returns per unit of risk. Amundi 3 Mois is currently generating about 1.27 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	Very Strong
Accuracy	100.0%
Values	Daily Returns

CM AM Monplus NE  vs.  Amundi 3 Mois

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 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.

Pair Trading with CM AM and Amundi 3

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

The idea behind CM AM Monplus NE and Amundi 3 Mois 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.