Correlation Between Eurazeo and Amundi SA

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

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

Diversification Opportunities for Eurazeo and Amundi SA

-0.15

Correlation Coefficient

Eurazeo  Amundi SA

Good diversification

The 3 months correlation between Eurazeo and Amundi is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Amundi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SA and Eurazeo 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 Eurazeo are associated (or correlated) with Amundi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SA has no effect on the direction of Eurazeo i.e., Eurazeo and Amundi SA go up and down completely randomly.

Pair Corralation between Eurazeo and Amundi SA

Assuming the 90 days horizon Eurazeo is expected to generate 16.83 times less return on investment than Amundi SA. In addition to that, Eurazeo is 1.11 times more volatile than Amundi SA. It trades about 0.01 of its total potential returns per unit of risk. Amundi SA is currently generating about 0.19 per unit of volatility. If you would invest  6,360  in Amundi SA on December 30, 2024 and sell it today you would earn a total of  1,045  from holding Amundi SA or generate 16.43% return on investment over 90 days.

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

Eurazeo  vs.  Amundi SA

Eurazeo

Risk-Adjusted Performance

Very Weak

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

Amundi SA

Risk-Adjusted Performance

Good

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

Pair Trading with Eurazeo and Amundi SA

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

The idea behind Eurazeo and Amundi SA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.