Correlation Between HSBC SP and Amundi German
Can any of the company-specific risk be diversified away by investing in both HSBC SP and Amundi German 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 HSBC SP and Amundi German into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC SP 500 and Amundi German Bund, you can compare the effects of market volatilities on HSBC SP and Amundi German 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 HSBC SP with a short position of Amundi German. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC SP and Amundi German.
Diversification Opportunities for HSBC SP and Amundi German
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HSBC and Amundi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HSBC SP 500 and Amundi German Bund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi German Bund and HSBC 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 HSBC SP 500 are associated (or correlated) with Amundi German. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi German Bund has no effect on the direction of HSBC SP i.e., HSBC SP and Amundi German go up and down completely randomly.
Pair Corralation between HSBC SP and Amundi German
Assuming the 90 days trading horizon HSBC SP 500 is expected to generate 2.97 times more return on investment than Amundi German. However, HSBC SP is 2.97 times more volatile than Amundi German Bund. It trades about 0.26 of its potential returns per unit of risk. Amundi German Bund is currently generating about 0.09 per unit of risk. If you would invest 5,195 in HSBC SP 500 on August 30, 2024 and sell it today you would earn a total of 548.00 from holding HSBC SP 500 or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC SP 500 vs. Amundi German Bund
Performance |
| Timeline |
| HSBC SP 500 |
| Amundi German Bund |
HSBC SP and Amundi German Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC SP and Amundi German
The main advantage of trading using opposite HSBC SP and Amundi German positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC SP position performs unexpectedly, Amundi German 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 German will offset losses from the drop in Amundi German's long position.| HSBC SP vs. Manitou BF SA | HSBC SP vs. Ossiam Minimum Variance | HSBC SP vs. Ekinops SA | HSBC SP vs. Orapi SA |
| Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi Index Solutions | Amundi German vs. Amundi SP 500 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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