Correlation Between IShares JP and Amundi Index
Can any of the company-specific risk be diversified away by investing in both IShares JP and Amundi Index 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 IShares JP and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and Amundi Index Solutions, you can compare the effects of market volatilities on IShares JP and Amundi Index 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 IShares JP with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and Amundi Index.
Diversification Opportunities for IShares JP and Amundi Index
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Amundi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and IShares JP 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 iShares JP Morgan are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of IShares JP i.e., IShares JP and Amundi Index go up and down completely randomly.
Pair Corralation between IShares JP and Amundi Index
Assuming the 90 days trading horizon IShares JP is expected to generate 2.16 times less return on investment than Amundi Index. But when comparing it to its historical volatility, iShares JP Morgan is 1.47 times less risky than Amundi Index. It trades about 0.05 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11,215 in Amundi Index Solutions on September 2, 2024 and sell it today you would earn a total of 1,296 from holding Amundi Index Solutions or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
iShares JP Morgan vs. Amundi Index Solutions
Performance |
| Timeline |
| iShares JP Morgan |
| Amundi Index Solutions |
IShares JP and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and Amundi Index
The main advantage of trading using opposite IShares JP and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP position performs unexpectedly, Amundi Index 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 Index will offset losses from the drop in Amundi Index's long position.The idea behind iShares JP Morgan and Amundi Index Solutions 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.| Amundi Index vs. Source SP 500 | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. iShares JP Morgan | Amundi Index 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |