Correlation Between Source SP and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Source SP 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 Source SP and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Source SP 500 and Amundi Index Solutions, you can compare the effects of market volatilities on Source SP 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 Source SP with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Source SP and Amundi Index.
Diversification Opportunities for Source SP and Amundi Index
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Source and Amundi is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Source SP 500 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 Source SP 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 Source SP 500 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 Source SP i.e., Source SP and Amundi Index go up and down completely randomly.
Pair Corralation between Source SP and Amundi Index
Assuming the 90 days trading horizon Source SP 500 is expected to generate 1.15 times more return on investment than Amundi Index. However, Source SP is 1.15 times more volatile than Amundi Index Solutions. It trades about 0.1 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.06 per unit of risk. If you would invest 3,121 in Source SP 500 on September 2, 2024 and sell it today you would earn a total of 1,541 from holding Source SP 500 or generate 49.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Source SP 500 vs. Amundi Index Solutions
Performance |
| Timeline |
| Source SP 500 |
| Amundi Index Solutions |
Source SP and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Source SP and Amundi Index
The main advantage of trading using opposite Source SP and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Source SP 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.| Source SP vs. UBS Fund Solutions | Source SP vs. Vanguard Funds Public | Source SP vs. iShares Core SP | Source SP vs. iShares Core MSCI |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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