Correlation Between Amundi Index and Relief Therapeutics

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

Diversification Opportunities for Amundi Index and Relief Therapeutics

0.41

Correlation Coefficient

Amundi Index  Relief Therapeutics

Very weak diversification

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

Pair Corralation between Amundi Index and Relief Therapeutics

Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 0.07 times more return on investment than Relief Therapeutics. However, Amundi Index Solutions is 13.78 times less risky than Relief Therapeutics. It trades about 0.28 of its potential returns per unit of risk. Relief Therapeutics Holding is currently generating about -0.14 per unit of risk. If you would invest  11,528  in Amundi Index Solutions on September 17, 2024 and sell it today you would earn a total of  330.00  from holding Amundi Index Solutions or generate 2.86% return on investment over 90 days.

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

Amundi Index Solutions  vs.  Relief Therapeutics Holding

Amundi Index Solutions

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Amundi Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Relief Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Relief Therapeutics Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Relief Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Index and Relief Therapeutics

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

The idea behind Amundi Index Solutions and Relief Therapeutics Holding 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.