Correlation Between ANT and HSBC SP
Can any of the company-specific risk be diversified away by investing in both ANT and HSBC SP 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 ANT and HSBC SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and HSBC SP 500, you can compare the effects of market volatilities on ANT and HSBC SP 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 ANT with a short position of HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and HSBC SP.
Diversification Opportunities for ANT and HSBC SP
Very good diversification
The 3 months correlation between ANT and HSBC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ANT and HSBC SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC SP 500 and ANT 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 ANT are associated (or correlated) with HSBC SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC SP 500 has no effect on the direction of ANT i.e., ANT and HSBC SP go up and down completely randomly.
Pair Corralation between ANT and HSBC SP
Assuming the 90 days trading horizon ANT is expected to generate 116.7 times more return on investment than HSBC SP. However, ANT is 116.7 times more volatile than HSBC SP 500. It trades about 0.16 of its potential returns per unit of risk. HSBC SP 500 is currently generating about 0.17 per unit of risk. If you would invest 610.00 in ANT on November 2, 2024 and sell it today you would lose (463.00) from holding ANT or give up 75.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
ANT vs. HSBC SP 500
Performance |
| Timeline |
| ANT |
| HSBC SP 500 |
ANT and HSBC SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and HSBC SP
The main advantage of trading using opposite ANT and HSBC SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, HSBC SP 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 SP will offset losses from the drop in HSBC SP's long position.The idea behind ANT and HSBC SP 500 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 SP vs. HSBC MSCI China | HSBC SP vs. HSBC Emerging Market | HSBC SP vs. HSBC USA Sustainable | HSBC SP vs. HSBC MSCI Japan |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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