Correlation Between Granite 3x and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Granite 3x and HSBC 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 Granite 3x and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and HSBC MSCI China, you can compare the effects of market volatilities on Granite 3x and HSBC 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 Granite 3x with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and HSBC MSCI.
Diversification Opportunities for Granite 3x and HSBC MSCI
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Granite and HSBC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and HSBC MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI China and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI China has no effect on the direction of Granite 3x i.e., Granite 3x and HSBC MSCI go up and down completely randomly.
Pair Corralation between Granite 3x and HSBC MSCI
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the HSBC MSCI. In addition to that, Granite 3x is 3.7 times more volatile than HSBC MSCI China. It trades about -0.1 of its total potential returns per unit of risk. HSBC MSCI China is currently generating about -0.08 per unit of volatility. If you would invest 625.00 in HSBC MSCI China on September 3, 2024 and sell it today you would lose (18.00) from holding HSBC MSCI China or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Granite 3x LVMH vs. HSBC MSCI China
Performance |
| Timeline |
| Granite 3x LVMH |
| HSBC MSCI China |
Granite 3x and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and HSBC MSCI
The main advantage of trading using opposite Granite 3x and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, HSBC 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 HSBC MSCI will offset losses from the drop in HSBC MSCI's long position.The idea behind Granite 3x LVMH and HSBC MSCI China 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.| HSBC MSCI vs. HSBC Emerging Market | HSBC MSCI vs. HSBC USA Sustainable | HSBC MSCI vs. HSBC MSCI Japan | HSBC MSCI vs. HSBC MUCPAB ETF |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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