Correlation Between Amundi MSCI and Global Opportunities

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

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

Diversification Opportunities for Amundi MSCI and Global Opportunities

0.41

Correlation Coefficient

Amundi MSCI  Global Opportunities

Very weak diversification

The 3 months correlation between Amundi and Global is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI UK and Global Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunities and Amundi MSCI 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 MSCI UK are associated (or correlated) with Global Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunities has no effect on the direction of Amundi MSCI i.e., Amundi MSCI and Global Opportunities go up and down completely randomly.

Pair Corralation between Amundi MSCI and Global Opportunities

Assuming the 90 days trading horizon Amundi MSCI UK is expected to generate 0.52 times more return on investment than Global Opportunities. However, Amundi MSCI UK is 1.91 times less risky than Global Opportunities. It trades about -0.04 of its potential returns per unit of risk. Global Opportunities Trust is currently generating about -0.07 per unit of risk. If you would invest  123,640  in Amundi MSCI UK on September 22, 2024 and sell it today you would lose (2,350) from holding Amundi MSCI UK or give up 1.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Amundi MSCI UK  vs.  Global Opportunities Trust

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.

Global Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Opportunities Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Amundi MSCI and Global Opportunities

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

The idea behind Amundi MSCI UK and Global Opportunities Trust 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.