Correlation Between BerolinaCapital Premium and Amundi Label

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

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

Diversification Opportunities for BerolinaCapital Premium and Amundi Label

-0.11

Correlation Coefficient

BerolinaCapital Premium  Amundi Label

Good diversification

The 3 months correlation between BerolinaCapital and Amundi is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BerolinaCapital Premium and Amundi Label Actions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Label Actions and BerolinaCapital Premium 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 BerolinaCapital Premium are associated (or correlated) with Amundi Label. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Label Actions has no effect on the direction of BerolinaCapital Premium i.e., BerolinaCapital Premium and Amundi Label go up and down completely randomly.

Pair Corralation between BerolinaCapital Premium and Amundi Label

Assuming the 90 days trading horizon BerolinaCapital Premium is expected to generate 1.25 times less return on investment than Amundi Label. In addition to that, BerolinaCapital Premium is 1.53 times more volatile than Amundi Label Actions. It trades about 0.2 of its total potential returns per unit of risk. Amundi Label Actions is currently generating about 0.38 per unit of volatility. If you would invest  29,335  in Amundi Label Actions on September 22, 2024 and sell it today you would earn a total of  1,132  from holding Amundi Label Actions or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

BerolinaCapital Premium  vs.  Amundi Label Actions

BerolinaCapital Premium

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BerolinaCapital Premium are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, BerolinaCapital Premium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Amundi Label Actions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Label Actions are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Amundi Label is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BerolinaCapital Premium and Amundi Label

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

The idea behind BerolinaCapital Premium and Amundi Label Actions 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.