Correlation Between Amedeo Air and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and HSBC Holdings 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 Amedeo Air and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and HSBC Holdings PLC, you can compare the effects of market volatilities on Amedeo Air and HSBC Holdings 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 Amedeo Air with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and HSBC Holdings.
Diversification Opportunities for Amedeo Air and HSBC Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amedeo and HSBC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and HSBC Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings PLC and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings PLC has no effect on the direction of Amedeo Air i.e., Amedeo Air and HSBC Holdings go up and down completely randomly.
Pair Corralation between Amedeo Air and HSBC Holdings
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 4.77 times more return on investment than HSBC Holdings. However, Amedeo Air is 4.77 times more volatile than HSBC Holdings PLC. It trades about 0.12 of its potential returns per unit of risk. HSBC Holdings PLC is currently generating about 0.24 per unit of risk. If you would invest 5,606 in Amedeo Air Four on November 7, 2024 and sell it today you would earn a total of 644.00 from holding Amedeo Air Four or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedeo Air Four vs. HSBC Holdings PLC
Performance |
| Timeline |
| Amedeo Air Four |
| HSBC Holdings PLC |
Amedeo Air and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and HSBC Holdings
The main advantage of trading using opposite Amedeo Air and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, HSBC Holdings 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 Holdings will offset losses from the drop in HSBC Holdings' long position.| Amedeo Air vs. Automatic Data Processing | Amedeo Air vs. FC Investment Trust | Amedeo Air vs. Smithson Investment Trust | Amedeo Air vs. Vietnam Enterprise Investments |
| HSBC Holdings vs. OneSavings Bank PLC | HSBC Holdings vs. Kinnevik Investment AB | HSBC Holdings vs. Gaztransport et Technigaz | HSBC Holdings vs. JB Hunt Transport |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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