Correlation Between IShares SP and Amundi Index

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

By analyzing existing cross correlation between iShares SP 500 and Amundi Index Solutions, you can compare the effects of market volatilities on IShares SP and Amundi Index 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 IShares SP with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Amundi Index.

Diversification Opportunities for IShares SP and Amundi Index

0.5

Correlation Coefficient

IShares SP  Amundi Index

Very weak diversification

The 3 months correlation between IShares and Amundi is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and IShares 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 iShares SP 500 are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of IShares SP i.e., IShares SP and Amundi Index go up and down completely randomly.

Pair Corralation between IShares SP and Amundi Index

Assuming the 90 days trading horizon iShares SP 500 is expected to under-perform the Amundi Index. But the etf apears to be less risky and, when comparing its historical volatility, iShares SP 500 is 1.22 times less risky than Amundi Index. The etf trades about -0.22 of its potential returns per unit of risk. The Amundi Index Solutions is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  11,674  in Amundi Index Solutions on December 5, 2024 and sell it today you would lose (382.00) from holding Amundi Index Solutions or give up 3.27% of portfolio value over 90 days.

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

iShares SP 500  vs.  Amundi Index Solutions

iShares SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

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.

Pair Trading with IShares SP and Amundi Index

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

The idea behind iShares SP 500 and Amundi Index Solutions 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.