Correlation Between Amundi CAC and IShares MSCI

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

By analyzing existing cross correlation between Amundi CAC 40 and iShares MSCI USA, you can compare the effects of market volatilities on Amundi CAC and IShares MSCI 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 CAC with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi CAC and IShares MSCI.

Diversification Opportunities for Amundi CAC and IShares MSCI

-0.7

Correlation Coefficient

Amundi CAC  IShares MSCI

Excellent diversification

The 3 months correlation between Amundi and IShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amundi CAC 40 and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and Amundi CAC 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 CAC 40 are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Amundi CAC i.e., Amundi CAC and IShares MSCI go up and down completely randomly.

Pair Corralation between Amundi CAC and IShares MSCI

Assuming the 90 days trading horizon Amundi CAC is expected to generate 87.19 times less return on investment than IShares MSCI. In addition to that, Amundi CAC is 1.17 times more volatile than iShares MSCI USA. It trades about 0.0 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about 0.29 per unit of volatility. If you would invest  678.00  in iShares MSCI USA on September 14, 2024 and sell it today you would earn a total of  106.00  from holding iShares MSCI USA or generate 15.63% return on investment over 90 days.

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

Amundi CAC 40  vs.  iShares MSCI USA

Amundi CAC 40

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi CAC 40 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Amundi CAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares MSCI USA

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IShares MSCI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi CAC and IShares MSCI

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

The idea behind Amundi CAC 40 and iShares MSCI USA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.