Correlation Between Multi Units and Amundi CAC

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

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

Diversification Opportunities for Multi Units and Amundi CAC

-0.08

Correlation Coefficient

Multi Units  Amundi CAC

Good diversification

The 3 months correlation between Multi and Amundi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and Amundi CAC 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi CAC 40 and Multi Units 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 Multi Units Luxembourg are associated (or correlated) with Amundi CAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi CAC 40 has no effect on the direction of Multi Units i.e., Multi Units and Amundi CAC go up and down completely randomly.

Pair Corralation between Multi Units and Amundi CAC

Assuming the 90 days trading horizon Multi Units Luxembourg is expected to generate 0.32 times more return on investment than Amundi CAC. However, Multi Units Luxembourg is 3.17 times less risky than Amundi CAC. It trades about -0.01 of its potential returns per unit of risk. Amundi CAC 40 is currently generating about -0.09 per unit of risk. If you would invest  15,714  in Multi Units Luxembourg on September 28, 2024 and sell it today you would lose (20.00) from holding Multi Units Luxembourg or give up 0.13% of portfolio value over 90 days.

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

Multi Units Luxembourg  vs.  Amundi CAC 40

Multi Units Luxembourg

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Multi Units and Amundi CAC

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

The idea behind Multi Units Luxembourg and Amundi CAC 40 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 CEOs Directory module to screen CEOs from public companies around the world.