Correlation Between Edenred SA and Amundi SA

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

Diversification Opportunities for Edenred SA and Amundi SA

0.51

Correlation Coefficient

Edenred SA  Amundi SA

Very weak diversification

The 3 months correlation between Edenred and Amundi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Edenred SA and Amundi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SA and Edenred 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 Edenred 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 Edenred SA i.e., Edenred SA and Amundi SA go up and down completely randomly.

Pair Corralation between Edenred SA and Amundi SA

Assuming the 90 days trading horizon Edenred SA is expected to under-perform the Amundi SA. In addition to that, Edenred SA is 1.52 times more volatile than Amundi SA. It trades about -0.01 of its total potential returns per unit of risk. Amundi SA is currently generating about 0.16 per unit of volatility. If you would invest  6,140  in Amundi SA on December 1, 2024 and sell it today you would earn a total of  740.00  from holding Amundi SA or generate 12.05% return on investment over 90 days.

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

Edenred SA  vs.  Amundi SA

Edenred SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edenred SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Edenred 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

Good

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

Pair Trading with Edenred SA and Amundi SA

The main advantage of trading using opposite Edenred SA and Amundi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edenred 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 Edenred 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.