Correlation Between Amundi Index and Chargeurs

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

Diversification Opportunities for Amundi Index and Chargeurs

-0.79

Correlation Coefficient

Amundi Index  Chargeurs

Pay attention - limited upside

The 3 months correlation between Amundi and Chargeurs is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Chargeurs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chargeurs SA 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 Chargeurs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chargeurs SA has no effect on the direction of Amundi Index i.e., Amundi Index and Chargeurs go up and down completely randomly.

Pair Corralation between Amundi Index and Chargeurs

Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 0.48 times more return on investment than Chargeurs. However, Amundi Index Solutions is 2.08 times less risky than Chargeurs. It trades about 0.36 of its potential returns per unit of risk. Chargeurs SA is currently generating about 0.15 per unit of risk. If you would invest  3,223  in Amundi Index Solutions on September 1, 2024 and sell it today you would earn a total of  237.00  from holding Amundi Index Solutions or generate 7.35% return on investment over 90 days.

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

Amundi Index Solutions  vs.  Chargeurs SA

Amundi Index Solutions

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi Index may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chargeurs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amundi Index and Chargeurs

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

The idea behind Amundi Index Solutions and Chargeurs 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.