Correlation Between Herald Investment and Amundi Physical

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

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

Diversification Opportunities for Herald Investment and Amundi Physical

-0.61

Correlation Coefficient

Herald Investment  Amundi Physical

Excellent diversification

The 3 months correlation between Herald and Amundi is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Amundi Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Physical Gold and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Amundi Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Physical Gold has no effect on the direction of Herald Investment i.e., Herald Investment and Amundi Physical go up and down completely randomly.

Pair Corralation between Herald Investment and Amundi Physical

Assuming the 90 days trading horizon Herald Investment Trust is expected to under-perform the Amundi Physical. In addition to that, Herald Investment is 1.4 times more volatile than Amundi Physical Gold. It trades about -0.09 of its total potential returns per unit of risk. Amundi Physical Gold is currently generating about 0.16 per unit of volatility. If you would invest  829,150  in Amundi Physical Gold on December 3, 2024 and sell it today you would earn a total of  72,850  from holding Amundi Physical Gold or generate 8.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Herald Investment Trust  vs.  Amundi Physical Gold

Herald Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Herald Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Amundi Physical Gold

Risk-Adjusted Performance

Good

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

Pair Trading with Herald Investment and Amundi Physical

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

The idea behind Herald Investment Trust and Amundi Physical Gold 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.