Correlation Between Gold Bullion and Amundi ETF

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

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

Diversification Opportunities for Gold Bullion and Amundi ETF

0.8

Correlation Coefficient

Gold Bullion  Amundi ETF

Very poor diversification

The 3 months correlation between Gold and Amundi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and Amundi ETF Govies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi ETF Govies and Gold Bullion 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 Gold Bullion Securities are associated (or correlated) with Amundi ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi ETF Govies has no effect on the direction of Gold Bullion i.e., Gold Bullion and Amundi ETF go up and down completely randomly.

Pair Corralation between Gold Bullion and Amundi ETF

Assuming the 90 days trading horizon Gold Bullion Securities is expected to generate 20.2 times more return on investment than Amundi ETF. However, Gold Bullion is 20.2 times more volatile than Amundi ETF Govies. It trades about 0.23 of its potential returns per unit of risk. Amundi ETF Govies is currently generating about 0.21 per unit of risk. If you would invest  22,970  in Gold Bullion Securities on December 29, 2024 and sell it today you would earn a total of  3,148  from holding Gold Bullion Securities or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Gold Bullion Securities  vs.  Amundi ETF Govies

Gold Bullion Securities

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Bullion Securities are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gold Bullion sustained solid returns over the last few months and may actually be approaching a breakup point.

Amundi ETF Govies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi ETF Govies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Amundi ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold Bullion and Amundi ETF

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

The idea behind Gold Bullion Securities and Amundi ETF Govies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.