Correlation Between Amundi SA and IDI SCA

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

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

Diversification Opportunities for Amundi SA and IDI SCA

0.69

Correlation Coefficient

Amundi SA  IDI SCA

Poor diversification

The 3 months correlation between Amundi and IDI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amundi SA and IDI SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI SCA 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 IDI SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI SCA has no effect on the direction of Amundi SA i.e., Amundi SA and IDI SCA go up and down completely randomly.

Pair Corralation between Amundi SA and IDI SCA

Assuming the 90 days trading horizon Amundi SA is expected to generate 1.54 times more return on investment than IDI SCA. However, Amundi SA is 1.54 times more volatile than IDI SCA. It trades about 0.19 of its potential returns per unit of risk. IDI SCA is currently generating about 0.17 per unit of risk. If you would invest  6,360  in Amundi SA on December 30, 2024 and sell it today you would earn a total of  1,045  from holding Amundi SA or generate 16.43% return on investment over 90 days.

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

Amundi SA  vs.  IDI SCA

Amundi SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi SA sustained solid returns over the last few months and may actually be approaching a breakup point.

IDI SCA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDI SCA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IDI SCA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Amundi SA and IDI SCA

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

The idea behind Amundi SA and IDI SCA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.