Correlation Between Amundi Index and EasyETF BNP

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

Diversification Opportunities for Amundi Index and EasyETF BNP

-0.37

Correlation Coefficient

Amundi Index  EasyETF BNP

Very good diversification

The 3 months correlation between Amundi and EasyETF is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and EasyETF BNP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyETF BNP 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 EasyETF BNP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyETF BNP has no effect on the direction of Amundi Index i.e., Amundi Index and EasyETF BNP go up and down completely randomly.

Pair Corralation between Amundi Index and EasyETF BNP

Assuming the 90 days trading horizon Amundi Index is expected to generate 2.81 times less return on investment than EasyETF BNP. In addition to that, Amundi Index is 1.09 times more volatile than EasyETF BNP. It trades about 0.02 of its total potential returns per unit of risk. EasyETF BNP is currently generating about 0.07 per unit of volatility. If you would invest  2,825  in EasyETF BNP on October 11, 2024 and sell it today you would earn a total of  48.00  from holding EasyETF BNP or generate 1.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Amundi Index Solutions  vs.  EasyETF BNP

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. Despite somewhat strong basic indicators, Amundi Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

EasyETF BNP

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Amundi Index and EasyETF BNP

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

The idea behind Amundi Index Solutions and EasyETF BNP 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.