Correlation Between Amundi SA and Caisse Rgionale

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

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

Diversification Opportunities for Amundi SA and Caisse Rgionale

-0.28

Correlation Coefficient

Amundi SA  Caisse Rgionale

Very good diversification

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

Pair Corralation between Amundi SA and Caisse Rgionale

Assuming the 90 days trading horizon Amundi SA is expected to under-perform the Caisse Rgionale. In addition to that, Amundi SA is 1.67 times more volatile than Caisse Rgionale du. It trades about -0.08 of its total potential returns per unit of risk. Caisse Rgionale du is currently generating about 0.05 per unit of volatility. If you would invest  7,400  in Caisse Rgionale du on September 2, 2024 and sell it today you would earn a total of  208.00  from holding Caisse Rgionale du or generate 2.81% return on investment over 90 days.

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

Amundi SA  vs.  Caisse Rgionale du

Amundi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Caisse Rgionale du

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Amundi SA and Caisse Rgionale

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

The idea behind Amundi SA and Caisse Rgionale du 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.