Correlation Between Amundi CAC and Xtrackers MSCI

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

By analyzing existing cross correlation between Amundi CAC 40 and Xtrackers MSCI Europe, you can compare the effects of market volatilities on Amundi CAC and Xtrackers MSCI 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 CAC with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi CAC and Xtrackers MSCI.

Diversification Opportunities for Amundi CAC and Xtrackers MSCI

0.0

Correlation Coefficient

Amundi CAC  Xtrackers MSCI

Pay attention - limited upside

The 3 months correlation between Amundi and Xtrackers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amundi CAC 40 and Xtrackers MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Europe and Amundi CAC 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 CAC 40 are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Europe has no effect on the direction of Amundi CAC i.e., Amundi CAC and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between Amundi CAC and Xtrackers MSCI

If you would invest  6,047  in Amundi CAC 40 on September 13, 2024 and sell it today you would earn a total of  1,253  from holding Amundi CAC 40 or generate 20.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Amundi CAC 40  vs.  Xtrackers MSCI Europe

Amundi CAC 40

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi CAC 40 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Amundi CAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xtrackers MSCI Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers MSCI Europe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xtrackers MSCI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amundi CAC and Xtrackers MSCI

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

The idea behind Amundi CAC 40 and Xtrackers MSCI Europe 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.