Correlation Between Multi Units and Amundi MSCI

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

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

Diversification Opportunities for Multi Units and Amundi MSCI

-0.46

Correlation Coefficient

Multi Units  Amundi MSCI

Very good diversification

The 3 months correlation between Multi and Amundi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France and Amundi MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI World and Multi Units 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 Multi Units France are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI World has no effect on the direction of Multi Units i.e., Multi Units and Amundi MSCI go up and down completely randomly.

Pair Corralation between Multi Units and Amundi MSCI

Assuming the 90 days trading horizon Multi Units France is expected to under-perform the Amundi MSCI. In addition to that, Multi Units is 1.43 times more volatile than Amundi MSCI World. It trades about -0.06 of its total potential returns per unit of risk. Amundi MSCI World is currently generating about 0.08 per unit of volatility. If you would invest  88,626  in Amundi MSCI World on October 5, 2024 and sell it today you would earn a total of  913.00  from holding Amundi MSCI World or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Multi Units France  vs.  Amundi MSCI World

Multi Units France

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amundi MSCI World

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi MSCI World are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi MSCI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multi Units and Amundi MSCI

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

The idea behind Multi Units France and Amundi MSCI World 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.