Correlation Between Nomura Funds and Amundi MSCI

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

By analyzing existing cross correlation between Nomura Funds Ireland and Amundi MSCI UK, you can compare the effects of market volatilities on Nomura Funds and Amundi MSCI 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 Nomura Funds with a short position of Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Funds and Amundi MSCI.

Diversification Opportunities for Nomura Funds and Amundi MSCI

0.28

Correlation Coefficient

Nomura Funds  Amundi MSCI

Modest diversification

The 3 months correlation between Nomura and Amundi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Funds Ireland and Amundi MSCI UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI UK and Nomura Funds 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 Nomura Funds Ireland are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI UK has no effect on the direction of Nomura Funds i.e., Nomura Funds and Amundi MSCI go up and down completely randomly.

Pair Corralation between Nomura Funds and Amundi MSCI

Assuming the 90 days trading horizon Nomura Funds Ireland is expected to under-perform the Amundi MSCI. In addition to that, Nomura Funds is 1.01 times more volatile than Amundi MSCI UK. It trades about -0.32 of its total potential returns per unit of risk. Amundi MSCI UK is currently generating about -0.17 per unit of volatility. If you would invest  122,028  in Amundi MSCI UK on October 1, 2024 and sell it today you would lose (2,507) from holding Amundi MSCI UK or give up 2.05% of portfolio value over 90 days.

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

Nomura Funds Ireland  vs.  Amundi MSCI UK

Nomura Funds Ireland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomura Funds Ireland has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Nomura Funds is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Amundi MSCI UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi MSCI UK has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Amundi MSCI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nomura Funds and Amundi MSCI

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

The idea behind Nomura Funds Ireland and Amundi MSCI UK 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..