Correlation Between Amundi Treasury and Invesco Health

Can any of the company-specific risk be diversified away by investing in both Amundi Treasury and Invesco Health 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 Invesco Health 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 Invesco Health Care, you can compare the effects of market volatilities on Amundi Treasury and Invesco Health 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 Invesco Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Treasury and Invesco Health.

Diversification Opportunities for Amundi Treasury and Invesco Health

0.8

Correlation Coefficient

Amundi Treasury  Invesco Health

Very poor diversification

The 3 months correlation between Amundi and Invesco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Treasury Bond and Invesco Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Health Care 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 Invesco Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Health Care has no effect on the direction of Amundi Treasury i.e., Amundi Treasury and Invesco Health go up and down completely randomly.

Pair Corralation between Amundi Treasury and Invesco Health

Assuming the 90 days trading horizon Amundi Treasury Bond is expected to generate 1.13 times more return on investment than Invesco Health. However, Amundi Treasury is 1.13 times more volatile than Invesco Health Care. It trades about -0.08 of its potential returns per unit of risk. Invesco Health Care is currently generating about -0.14 per unit of risk. If you would invest  762.00  in Amundi Treasury Bond on September 8, 2024 and sell it today you would lose (32.00) from holding Amundi Treasury Bond or give up 4.2% of portfolio value over 90 days.

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

Amundi Treasury Bond  vs.  Invesco Health Care

Amundi Treasury Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Invesco Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Invesco Health 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 Amundi Treasury and Invesco Health

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

The idea behind Amundi Treasury Bond and Invesco Health Care 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.