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 SP, 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

0.99

Correlation Coefficient

Amundi Index  SSgA SPDR

No risk reduction

The 3 months correlation between Amundi and SSgA is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Index Solutions and SSgA SPDR SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR SP 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 SP 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 Solutions is expected to under-perform the SSgA SPDR. In addition to that, Amundi Index is 1.08 times more volatile than SSgA SPDR SP. It trades about -0.16 of its total potential returns per unit of risk. SSgA SPDR SP is currently generating about -0.13 per unit of volatility. If you would invest  9,266  in SSgA SPDR SP on December 20, 2024 and sell it today you would lose (839.00) from holding SSgA SPDR SP or give up 9.05% of portfolio value over 90 days.

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

Amundi Index Solutions  vs.  SSgA SPDR SP

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 latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

SSgA SPDR SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days SSgA SPDR SP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

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 SP 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.