Correlation Between Amundi Index and Global X

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

By analyzing existing cross correlation between Amundi Index Solutions and Global X Blockchain, you can compare the effects of market volatilities on Amundi Index and Global X 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 Index with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Global X.

Diversification Opportunities for Amundi Index and Global X

-0.16

Correlation Coefficient

Amundi Index  Global X

Good diversification

The 3 months correlation between Amundi and Global is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and Amundi Index 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 Index Solutions are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of Amundi Index i.e., Amundi Index and Global X go up and down completely randomly.

Pair Corralation between Amundi Index and Global X

Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Amundi Index Solutions is 5.75 times less risky than Global X. The etf trades about -0.15 of its potential returns per unit of risk. The Global X Blockchain is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  853.00  in Global X Blockchain on August 31, 2024 and sell it today you would earn a total of  281.00  from holding Global X Blockchain or generate 32.94% return on investment over 90 days.

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

Amundi Index Solutions  vs.  Global X Blockchain

Amundi Index Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global X Blockchain

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Blockchain are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global X unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Index and Global X

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

The idea behind Amundi Index Solutions and Global X Blockchain 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.