Correlation Between HSBC SP and Amundi ETF

Specify exactly 2 symbols:
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

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between HSBC and Amundi is 0.97. 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 is expected to generate 1.05 times less return on investment than Amundi ETF. But when comparing it to its historical volatility, HSBC SP 500 is 1.47 times less risky than Amundi ETF. It trades about 0.14 of its potential returns per unit of risk. Amundi ETF PEA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,785  in Amundi ETF PEA on August 27, 2024 and sell it today you would earn a total of  1,115  from holding Amundi ETF PEA or generate 23.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

HSBC SP 500  vs.  Amundi ETF PEA

 Performance 
       Timeline  
HSBC SP 500 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in HSBC SP 500 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, HSBC SP sustained solid returns over the last few months and may actually be approaching a breakup point.
Amundi ETF PEA 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Amundi ETF PEA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi ETF may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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.
The idea behind HSBC SP 500 and Amundi ETF PEA 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators