Correlation Between Qs Moderate and Amundi Climate

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

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

Diversification Opportunities for Qs Moderate and Amundi Climate

-0.38

Correlation Coefficient

Qs Moderate  Amundi Climate

Very good diversification

The 3 months correlation between SCGCX and Amundi is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Qs Moderate Growth and Amundi Climate Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Climate Transition and Qs Moderate 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 Qs Moderate Growth are associated (or correlated) with Amundi Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Climate Transition has no effect on the direction of Qs Moderate i.e., Qs Moderate and Amundi Climate go up and down completely randomly.

Pair Corralation between Qs Moderate and Amundi Climate

Assuming the 90 days horizon Qs Moderate Growth is expected to generate 1.58 times more return on investment than Amundi Climate. However, Qs Moderate is 1.58 times more volatile than Amundi Climate Transition. It trades about 0.15 of its potential returns per unit of risk. Amundi Climate Transition is currently generating about -0.09 per unit of risk. If you would invest  1,779  in Qs Moderate Growth on September 12, 2024 and sell it today you would earn a total of  88.00  from holding Qs Moderate Growth or generate 4.95% return on investment over 90 days.

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

Qs Moderate Growth  vs.  Amundi Climate Transition

Qs Moderate Growth

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Moderate Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Qs Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amundi Climate Transition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Climate Transition has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Amundi Climate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qs Moderate and Amundi Climate

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

The idea behind Qs Moderate Growth and Amundi Climate Transition 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.