Correlation Between Coface SA and Amundi SA

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

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

Diversification Opportunities for Coface SA and Amundi SA

0.4

Correlation Coefficient

Coface SA  Amundi SA

Very weak diversification

The 3 months correlation between Coface and Amundi is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Coface SA and Amundi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SA and Coface 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 Coface SA are associated (or correlated) with Amundi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SA has no effect on the direction of Coface SA i.e., Coface SA and Amundi SA go up and down completely randomly.

Pair Corralation between Coface SA and Amundi SA

Assuming the 90 days trading horizon Coface SA is expected to generate 0.6 times more return on investment than Amundi SA. However, Coface SA is 1.68 times less risky than Amundi SA. It trades about 0.0 of its potential returns per unit of risk. Amundi SA is currently generating about -0.08 per unit of risk. If you would invest  1,465  in Coface SA on September 2, 2024 and sell it today you would lose (1.00) from holding Coface SA or give up 0.07% of portfolio value over 90 days.

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

Coface SA  vs.  Amundi SA

Coface SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coface SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Coface SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Coface SA and Amundi SA

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

The idea behind Coface SA and Amundi 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.