Correlation Between VanEck Defense and Amundi Euro

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

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

Diversification Opportunities for VanEck Defense and Amundi Euro

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Correlation Coefficient

VanEck Defense  Amundi Euro

Pay attention - limited upside

The 3 months correlation between VanEck and Amundi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Defense ETF and Amundi Euro Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Euro Stoxx and VanEck Defense 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 VanEck Defense ETF are associated (or correlated) with Amundi Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Euro Stoxx has no effect on the direction of VanEck Defense i.e., VanEck Defense and Amundi Euro go up and down completely randomly.

Pair Corralation between VanEck Defense and Amundi Euro

If you would invest  3,282  in Amundi Euro Stoxx on October 4, 2024 and sell it today you would earn a total of  6.00  from holding Amundi Euro Stoxx or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VanEck Defense ETF  vs.  Amundi Euro Stoxx

VanEck Defense ETF

Risk-Adjusted Performance

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Very Weak

Over the last 90 days VanEck Defense ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, VanEck Defense is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Amundi Euro Stoxx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Euro Stoxx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Amundi Euro is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VanEck Defense and Amundi Euro

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

The idea behind VanEck Defense ETF and Amundi Euro Stoxx 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.