Correlation Between Amundi Index and Fidelity Global

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

Diversification Opportunities for Amundi Index and Fidelity Global

-0.1

Correlation Coefficient

Amundi Index  Fidelity Global

Good diversification

The 3 months correlation between Amundi and Fidelity is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Fidelity Global Qualityome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Qual 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Qual has no effect on the direction of Amundi Index i.e., Amundi Index and Fidelity Global go up and down completely randomly.

Pair Corralation between Amundi Index and Fidelity Global

Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 2.18 times more return on investment than Fidelity Global. However, Amundi Index is 2.18 times more volatile than Fidelity Global Qualityome. It trades about 0.04 of its potential returns per unit of risk. Fidelity Global Qualityome is currently generating about 0.06 per unit of risk. If you would invest  3,970  in Amundi Index Solutions on September 16, 2024 and sell it today you would earn a total of  118.00  from holding Amundi Index Solutions or generate 2.97% 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.  Fidelity Global Qualityome

Amundi Index Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Amundi Index is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fidelity Global Qual

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Qualityome are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fidelity Global 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 Index and Fidelity Global

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

The idea behind Amundi Index Solutions and Fidelity Global Qualityome 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.