Correlation Between Amundi Index and Source SP
Can any of the company-specific risk be diversified away by investing in both Amundi Index and Source SP 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 Source SP 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 Source SP 500, you can compare the effects of market volatilities on Amundi Index and Source SP 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 Source SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and Source SP.
Diversification Opportunities for Amundi Index and Source SP
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amundi and Source is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and Source SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source 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 Source SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source SP 500 has no effect on the direction of Amundi Index i.e., Amundi Index and Source SP go up and down completely randomly.
Pair Corralation between Amundi Index and Source SP
Assuming the 90 days trading horizon Amundi Index is expected to generate 3.92 times less return on investment than Source SP. But when comparing it to its historical volatility, Amundi Index Solutions is 1.32 times less risky than Source SP. It trades about 0.04 of its potential returns per unit of risk. Source SP 500 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,533 in Source SP 500 on September 1, 2024 and sell it today you would earn a total of 129.00 from holding Source SP 500 or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Index Solutions vs. Source SP 500
Performance |
| Timeline |
| Amundi Index Solutions |
| Source SP 500 |
Amundi Index and Source SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Index and Source SP
The main advantage of trading using opposite Amundi Index and Source SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, Source SP 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 Source SP will offset losses from the drop in Source SP's long position.| Amundi Index vs. Source SP 500 | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. iShares JP Morgan | Amundi Index vs. Amundi Index Solutions |
| Source SP vs. UBS Fund Solutions | Source SP vs. Xtrackers Nikkei 225 | Source SP vs. iShares VII PLC | Source SP vs. Vanguard Funds Public |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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