Correlation Between Amundi Index and Ams AG

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

By analyzing existing cross correlation between Amundi Index Solutions and Ams AG, you can compare the effects of market volatilities on Amundi Index and Ams AG 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 Index with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Ams AG.

Diversification Opportunities for Amundi Index and Ams AG

-0.61

Correlation Coefficient

Amundi Index  Ams AG

Excellent diversification

The 3 months correlation between Amundi and Ams is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG and Amundi Index 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 Index Solutions are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of Amundi Index i.e., Amundi Index and Ams AG go up and down completely randomly.

Pair Corralation between Amundi Index and Ams AG

Assuming the 90 days trading horizon Amundi Index is expected to generate 9.06 times less return on investment than Ams AG. But when comparing it to its historical volatility, Amundi Index Solutions is 3.44 times less risky than Ams AG. It trades about 0.04 of its potential returns per unit of risk. Ams AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  603.00  in Ams AG on October 20, 2024 and sell it today you would earn a total of  37.00  from holding Ams AG or generate 6.14% return on investment over 90 days.

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

Amundi Index Solutions  vs.  Ams AG

Amundi Index Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amundi Index is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Amundi Index and Ams AG

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

The idea behind Amundi Index Solutions and Ams AG 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.