Correlation Between HSBC SP and Amundi ETF
Can any of the company-specific risk be diversified away by investing in both HSBC SP and Amundi ETF 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 ETF 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 ETF PEA, you can compare the effects of market volatilities on HSBC SP and Amundi ETF 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 ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC SP and Amundi ETF.
Diversification Opportunities for HSBC SP and Amundi ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HSBC and Amundi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding HSBC SP 500 and Amundi ETF PEA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi ETF PEA 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 ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi ETF PEA has no effect on the direction of HSBC SP i.e., HSBC SP and Amundi ETF go up and down completely randomly.
Pair Corralation between HSBC SP and Amundi ETF
Assuming the 90 days trading horizon HSBC SP 500 is expected to generate 1.41 times more return on investment than Amundi ETF. However, HSBC SP is 1.41 times more volatile than Amundi ETF PEA. It trades about 0.38 of its potential returns per unit of risk. Amundi ETF PEA is currently generating about 0.33 per unit of risk. If you would invest 5,309 in HSBC SP 500 on September 3, 2024 and sell it today you would earn a total of 474.00 from holding HSBC SP 500 or generate 8.93% 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 ETF PEA
Performance |
| Timeline |
| HSBC SP 500 |
| Amundi ETF PEA |
HSBC SP and Amundi ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC SP and Amundi ETF
The main advantage of trading using opposite HSBC SP and Amundi ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC SP position performs unexpectedly, Amundi ETF 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 ETF will offset losses from the drop in Amundi ETF'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 ETF vs. Amundi Index Solutions | Amundi ETF vs. Amundi Index Solutions | Amundi ETF vs. Amundi MSCI World | Amundi ETF 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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