Correlation Between Amundi Index and SPDR Barclays

Can any of the company-specific risk be diversified away by investing in both Amundi Index and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Cap, you can compare the effects of market volatilities on Amundi Index and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Index and SPDR Barclays.

Diversification Opportunities for Amundi Index and SPDR Barclays

-0.22

Correlation Coefficient

Amundi Index  SPDR Barclays

Very good diversification

The 3 months correlation between Amundi and SPDR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and SPDR Barclays Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Cap 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Cap has no effect on the direction of Amundi Index i.e., Amundi Index and SPDR Barclays go up and down completely randomly.

Pair Corralation between Amundi Index and SPDR Barclays

Assuming the 90 days trading horizon Amundi Index Solutions is expected to under-perform the SPDR Barclays. In addition to that, Amundi Index is 1.18 times more volatile than SPDR Barclays Cap. It trades about -0.01 of its total potential returns per unit of risk. SPDR Barclays Cap is currently generating about 0.07 per unit of volatility. If you would invest  9,162  in SPDR Barclays Cap on December 1, 2024 and sell it today you would earn a total of  162.00  from holding SPDR Barclays Cap or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Amundi Index Solutions  vs.  SPDR Barclays Cap

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 latest stock price disturbance, may contribute to short-term losses for the investors.

SPDR Barclays Cap

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Cap are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amundi Index and SPDR Barclays

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

The idea behind Amundi Index Solutions and SPDR Barclays Cap 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.