Correlation Between Amundi MSCI and IShares Smart

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

By analyzing existing cross correlation between Amundi MSCI Europe and iShares Smart City, you can compare the effects of market volatilities on Amundi MSCI and IShares Smart 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 MSCI with a short position of IShares Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi MSCI and IShares Smart.

Diversification Opportunities for Amundi MSCI and IShares Smart

-0.05

Correlation Coefficient

Amundi MSCI  IShares Smart

Good diversification

The 3 months correlation between Amundi and IShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI Europe and iShares Smart City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Smart City and Amundi MSCI 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 MSCI Europe are associated (or correlated) with IShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Smart City has no effect on the direction of Amundi MSCI i.e., Amundi MSCI and IShares Smart go up and down completely randomly.

Pair Corralation between Amundi MSCI and IShares Smart

Assuming the 90 days trading horizon Amundi MSCI Europe is expected to under-perform the IShares Smart. But the etf apears to be less risky and, when comparing its historical volatility, Amundi MSCI Europe is 1.16 times less risky than IShares Smart. The etf trades about -0.08 of its potential returns per unit of risk. The iShares Smart City is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  724.00  in iShares Smart City on October 6, 2024 and sell it today you would earn a total of  23.00  from holding iShares Smart City or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amundi MSCI Europe  vs.  iShares Smart City

Amundi MSCI Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi MSCI Europe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Amundi MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares Smart City

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Smart City are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares Smart is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amundi MSCI and IShares Smart

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

The idea behind Amundi MSCI Europe and iShares Smart City 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.