Correlation Between Amundi Index and SSgA SPDR

Can any of the company-specific risk be diversified away by investing in both Amundi Index and SSgA SPDR 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 Amundi Index and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amundi Index Solutions and SSgA SPDR ETFs, you can compare the effects of market volatilities on Amundi Index and SSgA SPDR 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 Amundi Index with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and SSgA SPDR.

Diversification Opportunities for Amundi Index and SSgA SPDR

0.38

Correlation Coefficient

Amundi Index  SSgA SPDR

Weak diversification

The 3 months correlation between Amundi and SSgA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and Amundi Index 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 Amundi Index Solutions are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Amundi Index i.e., Amundi Index and SSgA SPDR go up and down completely randomly.

Pair Corralation between Amundi Index and SSgA SPDR

Assuming the 90 days trading horizon Amundi Index is expected to generate 36.95 times less return on investment than SSgA SPDR. But when comparing it to its historical volatility, Amundi Index Solutions is 1.02 times less risky than SSgA SPDR. It trades about 0.01 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  9,272  in SSgA SPDR ETFs on December 29, 2024 and sell it today you would earn a total of  1,742  from holding SSgA SPDR ETFs or generate 18.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Amundi Index Solutions  vs.  SSgA SPDR ETFs

Amundi Index Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amundi Index Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Amundi Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SSgA SPDR ETFs

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SSgA SPDR sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi Index and SSgA SPDR

The main advantage of trading using opposite Amundi Index and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Index position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.

The idea behind Amundi Index Solutions and SSgA SPDR ETFs 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..