Correlation Between Amundi Index and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both Amundi Index and SPDR Dow 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 SPDR Dow 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 SPDR Dow Jones, you can compare the effects of market volatilities on Amundi Index and SPDR Dow 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 SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and SPDR Dow.
Diversification Opportunities for Amundi Index and SPDR Dow
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amundi and SPDR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones 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 SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of Amundi Index i.e., Amundi Index and SPDR Dow go up and down completely randomly.
Pair Corralation between Amundi Index and SPDR Dow
Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the SPDR Dow. In addition to that, Amundi Index is 1.29 times more volatile than SPDR Dow Jones. It trades about -0.2 of its total potential returns per unit of risk. SPDR Dow Jones is currently generating about -0.07 per unit of volatility. If you would invest 3,559 in SPDR Dow Jones on August 25, 2024 and sell it today you would lose (51.00) from holding SPDR Dow Jones or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amundi Index Solutions vs. SPDR Dow Jones
Performance |
| Timeline |
| Amundi Index Solutions |
| SPDR Dow Jones |
Amundi Index and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and SPDR Dow
The main advantage of trading using opposite Amundi Index and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| Amundi Index vs. Vanguard FTSE Developed | Amundi Index vs. Leverage Shares 2x | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Albion Venture Capital |
| SPDR Dow vs. SPDR SP Dividend | SPDR Dow vs. SPDR Barclays Euro | SPDR Dow vs. SPDR SP Consumer | SPDR Dow vs. SPDR SP Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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