Correlation Between Palladyne and Amundi SA

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

By analyzing existing cross correlation between Palladyne AI Corp and Amundi SA, you can compare the effects of market volatilities on Palladyne and Amundi SA 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 Palladyne with a short position of Amundi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palladyne and Amundi SA.

Diversification Opportunities for Palladyne and Amundi SA

-0.41

Correlation Coefficient

Palladyne  Amundi SA

Very good diversification

The 3 months correlation between Palladyne and Amundi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Palladyne AI Corp and Amundi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SA and Palladyne 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 Palladyne AI Corp are associated (or correlated) with Amundi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SA has no effect on the direction of Palladyne i.e., Palladyne and Amundi SA go up and down completely randomly.

Pair Corralation between Palladyne and Amundi SA

Given the investment horizon of 90 days Palladyne AI Corp is expected to generate 13.05 times more return on investment than Amundi SA. However, Palladyne is 13.05 times more volatile than Amundi SA. It trades about 0.18 of its potential returns per unit of risk. Amundi SA is currently generating about -0.05 per unit of risk. If you would invest  161.00  in Palladyne AI Corp on September 1, 2024 and sell it today you would earn a total of  485.00  from holding Palladyne AI Corp or generate 301.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Palladyne AI Corp  vs.  Amundi SA

Palladyne AI Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Palladyne AI Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Palladyne displayed solid returns over the last few months and may actually be approaching a breakup point.

Amundi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amundi SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Palladyne and Amundi SA

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

The idea behind Palladyne AI Corp and Amundi SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.