Correlation Between Amundi Index and Straumann Holding

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

Diversification Opportunities for Amundi Index and Straumann Holding

0.75

Correlation Coefficient

Amundi Index  Straumann Holding

Poor diversification

The 3 months correlation between Amundi and Straumann is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding 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 Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Amundi Index i.e., Amundi Index and Straumann Holding go up and down completely randomly.

Pair Corralation between Amundi Index and Straumann Holding

Assuming the 90 days trading horizon Amundi Index is expected to generate 2.93 times less return on investment than Straumann Holding. But when comparing it to its historical volatility, Amundi Index Solutions is 2.1 times less risky than Straumann Holding. It trades about 0.14 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  11,030  in Straumann Holding AG on November 20, 2024 and sell it today you would earn a total of  1,855  from holding Straumann Holding AG or generate 16.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.08%
Values	Daily Returns

Amundi Index Solutions  vs.  Straumann Holding AG

Amundi Index Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amundi Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Straumann Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Straumann Holding AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Straumann Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Index and Straumann Holding

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

The idea behind Amundi Index Solutions and Straumann Holding AG 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.