Correlation Between GraniteShares FAANG and Amundi Index

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

By analyzing existing cross correlation between GraniteShares FAANG ETC and Amundi Index Solutions, you can compare the effects of market volatilities on GraniteShares FAANG and Amundi Index 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 GraniteShares FAANG with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FAANG and Amundi Index.

Diversification Opportunities for GraniteShares FAANG and Amundi Index

-0.32

Correlation Coefficient

GraniteShares FAANG  Amundi Index

Very good diversification

The 3 months correlation between GraniteShares and Amundi is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FAANG ETC and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and GraniteShares FAANG 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 GraniteShares FAANG ETC are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of GraniteShares FAANG i.e., GraniteShares FAANG and Amundi Index go up and down completely randomly.

Pair Corralation between GraniteShares FAANG and Amundi Index

Assuming the 90 days trading horizon GraniteShares FAANG ETC is expected to generate 1.49 times more return on investment than Amundi Index. However, GraniteShares FAANG is 1.49 times more volatile than Amundi Index Solutions. It trades about 0.35 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.0 per unit of risk. If you would invest  4,722  in GraniteShares FAANG ETC on September 23, 2024 and sell it today you would earn a total of  420.00  from holding GraniteShares FAANG ETC or generate 8.89% return on investment over 90 days.

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

GraniteShares FAANG ETC  vs.  Amundi Index Solutions

GraniteShares FAANG ETC

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares FAANG ETC are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GraniteShares FAANG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amundi Index Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amundi Index is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GraniteShares FAANG and Amundi Index

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

The idea behind GraniteShares FAANG ETC and Amundi Index Solutions 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.