Correlation Between Amundi EUR and CT Private

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

Diversification Opportunities for Amundi EUR and CT Private

0.06

Correlation Coefficient

Amundi EUR  CT Private

Significant diversification

The 3 months correlation between Amundi and CTPE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and CT Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Private Equity 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 CT Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Private Equity has no effect on the direction of Amundi EUR i.e., Amundi EUR and CT Private go up and down completely randomly.

Pair Corralation between Amundi EUR and CT Private

Assuming the 90 days trading horizon Amundi EUR High is expected to generate 0.12 times more return on investment than CT Private. However, Amundi EUR High is 8.3 times less risky than CT Private. It trades about 0.04 of its potential returns per unit of risk. CT Private Equity is currently generating about -0.03 per unit of risk. If you would invest  10,530  in Amundi EUR High on December 28, 2024 and sell it today you would earn a total of  48.00  from holding Amundi EUR High or generate 0.46% return on investment over 90 days.

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

Amundi EUR High  vs.  CT Private Equity

Amundi EUR High

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi EUR High are ranked lower than 3 (%) 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.

CT Private Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Amundi EUR and CT Private

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

The idea behind Amundi EUR High and CT Private Equity 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .