Correlation Between Nasdaq and Amundi ETF

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

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

Diversification Opportunities for Nasdaq and Amundi ETF

0.89

Correlation Coefficient

Nasdaq  Amundi ETF

Very poor diversification

The 3 months correlation between Nasdaq and Amundi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Amundi ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi ETF MSCI and Nasdaq 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 Nasdaq Inc 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 MSCI has no effect on the direction of Nasdaq i.e., Nasdaq and Amundi ETF go up and down completely randomly.

Pair Corralation between Nasdaq and Amundi ETF

Given the investment horizon of 90 days Nasdaq is expected to generate 1.26 times less return on investment than Amundi ETF. In addition to that, Nasdaq is 1.45 times more volatile than Amundi ETF MSCI. It trades about 0.1 of its total potential returns per unit of risk. Amundi ETF MSCI is currently generating about 0.18 per unit of volatility. If you would invest  56,064  in Amundi ETF MSCI on October 3, 2024 and sell it today you would earn a total of  4,773  from holding Amundi ETF MSCI or generate 8.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  Amundi ETF MSCI

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Amundi ETF MSCI

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi ETF MSCI are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi ETF may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nasdaq and Amundi ETF

The main advantage of trading using opposite Nasdaq and Amundi ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc and Amundi ETF MSCI 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.