Correlation Between Franklin Libertyshares and Amundi Index

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

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

Diversification Opportunities for Franklin Libertyshares and Amundi Index

0.91

Correlation Coefficient

Franklin Libertyshares  Amundi Index

Almost no diversification

The 3 months correlation between Franklin and Amundi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Libertyshares ICAV and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and Franklin Libertyshares 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 Franklin Libertyshares ICAV are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Franklin Libertyshares i.e., Franklin Libertyshares and Amundi Index go up and down completely randomly.

Pair Corralation between Franklin Libertyshares and Amundi Index

Assuming the 90 days trading horizon Franklin Libertyshares ICAV is expected to under-perform the Amundi Index. In addition to that, Franklin Libertyshares is 1.03 times more volatile than Amundi Index Solutions. It trades about -0.13 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.05 per unit of volatility. If you would invest  331,400  in Amundi Index Solutions on October 9, 2024 and sell it today you would lose (8,875) from holding Amundi Index Solutions or give up 2.68% of portfolio value over 90 days.

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

Franklin Libertyshares ICAV  vs.  Amundi Index Solutions

Franklin Libertyshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Libertyshares ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Amundi Index Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Index Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amundi Index is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Franklin Libertyshares and Amundi Index

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

The idea behind Franklin Libertyshares ICAV and Amundi Index Solutions 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..