Correlation Between UBSFund Solutions and Amundi EUR

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

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

Diversification Opportunities for UBSFund Solutions and Amundi EUR

0.38

Correlation Coefficient

UBSFund Solutions  Amundi EUR

Weak diversification

The 3 months correlation between UBSFund and Amundi is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Amundi EUR High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi EUR High and UBSFund Solutions 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 UBSFund Solutions MSCI are associated (or correlated) with Amundi EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi EUR High has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Amundi EUR go up and down completely randomly.

Pair Corralation between UBSFund Solutions and Amundi EUR

Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to generate 2.46 times more return on investment than Amundi EUR. However, UBSFund Solutions is 2.46 times more volatile than Amundi EUR High. It trades about 0.12 of its potential returns per unit of risk. Amundi EUR High is currently generating about -0.1 per unit of risk. If you would invest  4,652  in UBSFund Solutions MSCI on October 26, 2024 and sell it today you would earn a total of  279.00  from holding UBSFund Solutions MSCI or generate 6.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.5%
Values	Daily Returns

UBSFund Solutions MSCI  vs.  Amundi EUR High

UBSFund Solutions MSCI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBSFund Solutions MSCI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, UBSFund Solutions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Amundi EUR High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi EUR High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Amundi EUR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UBSFund Solutions and Amundi EUR

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

The idea behind UBSFund Solutions MSCI and Amundi EUR High 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 Stocks Directory module to find actively traded stocks across global markets.