Correlation Between Amundi CAC and IShares MSCI

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Amundi CAC and IShares MSCI 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 CAC and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi CAC 40 and iShares MSCI World, you can compare the effects of market volatilities on Amundi CAC and IShares MSCI 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 CAC with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi CAC and IShares MSCI.

Diversification Opportunities for Amundi CAC and IShares MSCI

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amundi and IShares is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amundi CAC 40 and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World and Amundi CAC 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 CAC 40 are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI World has no effect on the direction of Amundi CAC i.e., Amundi CAC and IShares MSCI go up and down completely randomly.

Pair Corralation between Amundi CAC and IShares MSCI

Assuming the 90 days trading horizon Amundi CAC 40 is expected to under-perform the IShares MSCI. In addition to that, Amundi CAC is 1.01 times more volatile than iShares MSCI World. It trades about -0.06 of its total potential returns per unit of risk. iShares MSCI World is currently generating about 0.18 per unit of volatility. If you would invest  548.00  in iShares MSCI World on September 19, 2024 and sell it today you would earn a total of  32.00  from holding iShares MSCI World or generate 5.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amundi CAC 40  vs.  iShares MSCI World

 Performance 
       Timeline  
Amundi CAC 40 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
iShares MSCI World 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI World are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amundi CAC and IShares MSCI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amundi CAC and IShares MSCI

The main advantage of trading using opposite Amundi CAC and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi CAC position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.
The idea behind Amundi CAC 40 and iShares MSCI World 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets