Correlation Between HSBC SP and Amundi Index
Can any of the company-specific risk be diversified away by investing in both HSBC 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 HSBC 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 HSBC SP 500 and Amundi Index Solutions, you can compare the effects of market volatilities on HSBC 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 HSBC SP with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC SP and Amundi Index.
Diversification Opportunities for HSBC SP and Amundi Index
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between HSBC and Amundi is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding HSBC 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 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 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 HSBC SP i.e., HSBC SP and Amundi Index go up and down completely randomly.
Pair Corralation between HSBC SP and Amundi Index
Assuming the 90 days trading horizon HSBC SP is expected to generate 1.11 times less return on investment than Amundi Index. But when comparing it to its historical volatility, HSBC SP 500 is 1.11 times less risky than Amundi Index. It trades about 0.38 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 65,843 in Amundi Index Solutions on September 3, 2024 and sell it today you would earn a total of 6,534 from holding Amundi Index Solutions or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC SP 500 vs. Amundi Index Solutions
Performance |
| Timeline |
| HSBC SP 500 |
| Amundi Index Solutions |
HSBC SP and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC SP and Amundi Index
The main advantage of trading using opposite HSBC SP and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC 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.| HSBC SP vs. HSBC MSCI China | HSBC SP vs. HSBC Emerging Market | HSBC SP vs. HSBC USA Sustainable | HSBC SP vs. HSBC MSCI Japan |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Manitou BF SA | Amundi Index vs. Ossiam Minimum Variance |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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