Correlation Between Amundi EUR and LS 1x

Can any of the company-specific risk be diversified away by investing in both Amundi EUR and LS 1x 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 EUR and LS 1x into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amundi EUR High and LS 1x Tesla, you can compare the effects of market volatilities on Amundi EUR and LS 1x 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 EUR with a short position of LS 1x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi EUR and LS 1x.

Diversification Opportunities for Amundi EUR and LS 1x

-0.56

Correlation Coefficient

Amundi EUR  LS 1x

Excellent diversification

The 3 months correlation between Amundi and 1TSL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and LS 1x Tesla in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS 1x Tesla and Amundi EUR 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 EUR High are associated (or correlated) with LS 1x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS 1x Tesla has no effect on the direction of Amundi EUR i.e., Amundi EUR and LS 1x go up and down completely randomly.

Pair Corralation between Amundi EUR and LS 1x

Assuming the 90 days trading horizon Amundi EUR High is expected to generate 0.05 times more return on investment than LS 1x. However, Amundi EUR High is 21.37 times less risky than LS 1x. It trades about 0.07 of its potential returns per unit of risk. LS 1x Tesla is currently generating about -0.21 per unit of risk. If you would invest  10,512  in Amundi EUR High on December 23, 2024 and sell it today you would earn a total of  80.00  from holding Amundi EUR High or generate 0.76% return on investment over 90 days.

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

Amundi EUR High  vs.  LS 1x Tesla

Amundi EUR High

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi EUR High are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amundi EUR is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

LS 1x Tesla

Risk-Adjusted Performance

Very Weak

Over the last 90 days LS 1x Tesla has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Amundi EUR and LS 1x

The main advantage of trading using opposite Amundi EUR and LS 1x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi EUR position performs unexpectedly, LS 1x 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 LS 1x will offset losses from the drop in LS 1x's long position.

The idea behind Amundi EUR High and LS 1x Tesla 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.