Correlation Between Amundi Index and JPM AC

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

Diversification Opportunities for Amundi Index and JPM AC

0.6

Correlation Coefficient

Amundi Index  JPM AC

Poor diversification

The 3 months correlation between Amundi and JPM is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and JPM AC Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM AC Asia 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 JPM AC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM AC Asia has no effect on the direction of Amundi Index i.e., Amundi Index and JPM AC go up and down completely randomly.

Pair Corralation between Amundi Index and JPM AC

Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the JPM AC. In addition to that, Amundi Index is 1.15 times more volatile than JPM AC Asia. It trades about -0.26 of its total potential returns per unit of risk. JPM AC Asia is currently generating about -0.17 per unit of volatility. If you would invest  180,855  in JPM AC Asia on October 9, 2024 and sell it today you would lose (3,935) from holding JPM AC Asia or give up 2.18% of portfolio value over 90 days.

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

Amundi Index Solutions  vs.  JPM AC Asia

Amundi Index Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Index Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

JPM AC Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM AC Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JPM AC is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amundi Index and JPM AC

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

The idea behind Amundi Index Solutions and JPM AC Asia 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.