Correlation Between Amundi SA and Edenred SA

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

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

Diversification Opportunities for Amundi SA and Edenred SA

0.51

Correlation Coefficient

Amundi SA  Edenred SA

Very weak diversification

The 3 months correlation between Amundi and Edenred is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amundi SA and Edenred SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edenred SA 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 Edenred SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edenred SA has no effect on the direction of Amundi SA i.e., Amundi SA and Edenred SA go up and down completely randomly.

Pair Corralation between Amundi SA and Edenred SA

Assuming the 90 days trading horizon Amundi SA is expected to generate 0.66 times more return on investment than Edenred SA. However, Amundi SA is 1.52 times less risky than Edenred SA. It trades about 0.16 of its potential returns per unit of risk. Edenred SA is currently generating about -0.01 per unit of risk. If you would invest  6,140  in Amundi SA on December 1, 2024 and sell it today you would earn a total of  740.00  from holding Amundi SA or generate 12.05% return on investment over 90 days.

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

Amundi SA  vs.  Edenred SA

Amundi SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Edenred SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edenred SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Edenred SA 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 Edenred SA

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

The idea behind Amundi SA and Edenred SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.