Correlation Between Amundi EUR and VinaCapital Vietnam

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

Diversification Opportunities for Amundi EUR and VinaCapital Vietnam

-0.43

Correlation Coefficient

Amundi EUR  VinaCapital Vietnam

Very good diversification

The 3 months correlation between Amundi and VinaCapital is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Amundi EUR High and VinaCapital Vietnam Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinaCapital Vietnam 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 VinaCapital Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinaCapital Vietnam has no effect on the direction of Amundi EUR i.e., Amundi EUR and VinaCapital Vietnam go up and down completely randomly.

Pair Corralation between Amundi EUR and VinaCapital Vietnam

Assuming the 90 days trading horizon Amundi EUR High is expected to generate 0.2 times more return on investment than VinaCapital Vietnam. However, Amundi EUR High is 5.03 times less risky than VinaCapital Vietnam. It trades about 0.18 of its potential returns per unit of risk. VinaCapital Vietnam Opportunity is currently generating about -0.18 per unit of risk. If you would invest  10,525  in Amundi EUR High on December 2, 2024 and sell it today you would earn a total of  149.00  from holding Amundi EUR High or generate 1.42% 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.  VinaCapital Vietnam Opportunit

Amundi EUR High

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi EUR High are ranked lower than 12 (%) 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.

VinaCapital Vietnam

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VinaCapital Vietnam Opportunity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, VinaCapital Vietnam is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amundi EUR and VinaCapital Vietnam

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

The idea behind Amundi EUR High and VinaCapital Vietnam Opportunity 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.