Correlation Between Amundi Treasury and Mereo BioPharma
Can any of the company-specific risk be diversified away by investing in both Amundi Treasury and Mereo BioPharma 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 Amundi Treasury and Mereo BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi Treasury Bond and Mereo BioPharma Group, you can compare the effects of market volatilities on Amundi Treasury and Mereo BioPharma 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 Amundi Treasury with a short position of Mereo BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Treasury and Mereo BioPharma.
Diversification Opportunities for Amundi Treasury and Mereo BioPharma
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amundi and Mereo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Treasury Bond and Mereo BioPharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mereo BioPharma Group and Amundi Treasury 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 Amundi Treasury Bond are associated (or correlated) with Mereo BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mereo BioPharma Group has no effect on the direction of Amundi Treasury i.e., Amundi Treasury and Mereo BioPharma go up and down completely randomly.
Pair Corralation between Amundi Treasury and Mereo BioPharma
Assuming the 90 days trading horizon Amundi Treasury Bond is expected to generate 0.2 times more return on investment than Mereo BioPharma. However, Amundi Treasury Bond is 5.02 times less risky than Mereo BioPharma. It trades about -0.11 of its potential returns per unit of risk. Mereo BioPharma Group is currently generating about -0.05 per unit of risk. If you would invest 767.00 in Amundi Treasury Bond on September 6, 2024 and sell it today you would lose (41.00) from holding Amundi Treasury Bond or give up 5.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amundi Treasury Bond vs. Mereo BioPharma Group
Performance |
Timeline |
Amundi Treasury Bond |
Mereo BioPharma Group |
Amundi Treasury and Mereo BioPharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amundi Treasury and Mereo BioPharma
The main advantage of trading using opposite Amundi Treasury and Mereo BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Treasury position performs unexpectedly, Mereo BioPharma 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 Mereo BioPharma will offset losses from the drop in Mereo BioPharma's long position.Amundi Treasury vs. Amundi EUR High | Amundi Treasury vs. Amundi Index Solutions | Amundi Treasury vs. Amundi MSCI Pacific | Amundi Treasury vs. Amundi MSCI Europe |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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