Correlation Between Amundi SP and Multi Units

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

By analyzing existing cross correlation between Amundi SP Global and Multi Units France, you can compare the effects of market volatilities on Amundi SP and Multi Units 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 Amundi SP with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi SP and Multi Units.

Diversification Opportunities for Amundi SP and Multi Units

0.79

Correlation Coefficient

Amundi SP  Multi Units

Poor diversification

The 3 months correlation between Amundi and Multi is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Amundi SP Global and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and Amundi SP 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 Amundi SP Global are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of Amundi SP i.e., Amundi SP and Multi Units go up and down completely randomly.

Pair Corralation between Amundi SP and Multi Units

Assuming the 90 days trading horizon Amundi SP is expected to generate 4.5 times less return on investment than Multi Units. But when comparing it to its historical volatility, Amundi SP Global is 1.09 times less risky than Multi Units. It trades about 0.02 of its potential returns per unit of risk. Multi Units France is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  98.00  in Multi Units France on September 29, 2024 and sell it today you would earn a total of  56.00  from holding Multi Units France or generate 57.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Amundi SP Global  vs.  Multi Units France

Amundi SP Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Multi Units France

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Units France are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Multi Units is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amundi SP and Multi Units

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

The idea behind Amundi SP Global and Multi Units France 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.