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

-0.67

Correlation Coefficient

Herald Investment  Amundi Physical

Excellent diversification

The 3 months correlation between Herald and Amundi is -0.67. 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 1.49 times more volatile than Amundi Physical Gold. It trades about -0.23 of its total potential returns per unit of risk. Amundi Physical Gold is currently generating about 0.26 per unit of volatility. If you would invest  823,650  in Amundi Physical Gold on December 30, 2024 and sell it today you would earn a total of  120,863  from holding Amundi Physical Gold or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Amundi Physical Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Physical Gold are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amundi Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.