Correlation Between Reliance Steel and Amundi Actions

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

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

Diversification Opportunities for Reliance Steel and Amundi Actions

0.41

Correlation Coefficient

Reliance Steel  Amundi Actions

Very weak diversification

The 3 months correlation between Reliance and Amundi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and Amundi Actions Internationales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Actions Inter and Reliance Steel 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 Reliance Steel Aluminum are associated (or correlated) with Amundi Actions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Actions Inter has no effect on the direction of Reliance Steel i.e., Reliance Steel and Amundi Actions go up and down completely randomly.

Pair Corralation between Reliance Steel and Amundi Actions

Assuming the 90 days horizon Reliance Steel Aluminum is expected to under-perform the Amundi Actions. In addition to that, Reliance Steel is 1.92 times more volatile than Amundi Actions Internationales. It trades about -0.13 of its total potential returns per unit of risk. Amundi Actions Internationales is currently generating about -0.07 per unit of volatility. If you would invest  3,334  in Amundi Actions Internationales on October 17, 2024 and sell it today you would lose (31.00) from holding Amundi Actions Internationales or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Reliance Steel Aluminum  vs.  Amundi Actions Internationales

Reliance Steel Aluminum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reliance Steel Aluminum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Reliance Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Amundi Actions Inter

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Actions Internationales are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Amundi Actions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Reliance Steel and Amundi Actions

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

The idea behind Reliance Steel Aluminum and Amundi Actions Internationales 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.