Correlation Between Amundi Index and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Amundi Index and WisdomTree 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 WisdomTree 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 WisdomTree SP 500, you can compare the effects of market volatilities on Amundi Index and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and WisdomTree.
Diversification Opportunities for Amundi Index and WisdomTree
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and WisdomTree is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and WisdomTree SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SP 500 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SP 500 has no effect on the direction of Amundi Index i.e., Amundi Index and WisdomTree go up and down completely randomly.
Pair Corralation between Amundi Index and WisdomTree
Assuming the 90 days trading horizon Amundi Index Solutions is expected to generate 0.48 times more return on investment than WisdomTree. However, Amundi Index Solutions is 2.07 times less risky than WisdomTree. It trades about -0.14 of its potential returns per unit of risk. WisdomTree SP 500 is currently generating about -0.26 per unit of risk. If you would invest 4,198 in Amundi Index Solutions on September 5, 2024 and sell it today you would lose (145.00) from holding Amundi Index Solutions or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. WisdomTree SP 500
Performance |
| Timeline |
| Amundi Index Solutions |
| WisdomTree SP 500 |
Amundi Index and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and WisdomTree
The main advantage of trading using opposite Amundi Index and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| Amundi Index vs. Amundi EUR High | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi MSCI Pacific | Amundi Index vs. Amundi MSCI Europe |
| WisdomTree vs. Vanguard FTSE Developed | WisdomTree vs. Leverage Shares 2x | WisdomTree vs. Amundi Index Solutions | WisdomTree vs. Amundi Index Solutions |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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