Correlation Between CM AM and Amundi Convictions

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

Diversification Opportunities for CM AM and Amundi Convictions

0.63

Correlation Coefficient

CM AM  Amundi Convictions

Poor diversification

The 3 months correlation between 0P0001F96C and Amundi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE and Amundi Convictions ESR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Convictions ESR 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 Convictions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Convictions ESR has no effect on the direction of CM AM i.e., CM AM and Amundi Convictions go up and down completely randomly.

Pair Corralation between CM AM and Amundi Convictions

Assuming the 90 days trading horizon CM AM is expected to generate 1.02 times less return on investment than Amundi Convictions. But when comparing it to its historical volatility, CM AM Monplus NE is 46.9 times less risky than Amundi Convictions. It trades about 1.16 of its potential returns per unit of risk. Amundi Convictions ESR is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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

CM AM Monplus NE  vs.  Amundi Convictions ESR

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 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.

Pair Trading with CM AM and Amundi Convictions

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

The idea behind CM AM Monplus NE and Amundi Convictions ESR 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..