Correlation Between AmeriServ Financial and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both AmeriServ Financial 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 AmeriServ Financial and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmeriServ Financial and HSBC Holdings PLC, you can compare the effects of market volatilities on AmeriServ Financial 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 AmeriServ Financial with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeriServ Financial and HSBC Holdings.
Diversification Opportunities for AmeriServ Financial and HSBC Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AmeriServ and HSBC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AmeriServ Financial 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 AmeriServ Financial 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 AmeriServ Financial 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 AmeriServ Financial i.e., AmeriServ Financial and HSBC Holdings go up and down completely randomly.
Pair Corralation between AmeriServ Financial and HSBC Holdings
Given the investment horizon of 90 days AmeriServ Financial is expected to generate 1.03 times less return on investment than HSBC Holdings. In addition to that, AmeriServ Financial is 1.88 times more volatile than HSBC Holdings PLC. It trades about 0.06 of its total potential returns per unit of risk. HSBC Holdings PLC is currently generating about 0.11 per unit of volatility. If you would invest 4,296 in HSBC Holdings PLC on September 3, 2024 and sell it today you would earn a total of 393.00 from holding HSBC Holdings PLC or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmeriServ Financial vs. HSBC Holdings PLC
Performance |
| Timeline |
| AmeriServ Financial |
| HSBC Holdings PLC |
AmeriServ Financial and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmeriServ Financial and HSBC Holdings
The main advantage of trading using opposite AmeriServ Financial and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeriServ Financial 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.| AmeriServ Financial vs. JPMorgan Chase Co | AmeriServ Financial vs. Citigroup | AmeriServ Financial vs. Wells Fargo | AmeriServ Financial vs. Toronto Dominion Bank |
| HSBC Holdings vs. Partner Communications | HSBC Holdings vs. Merck Company | HSBC Holdings vs. Western Midstream Partners | HSBC Holdings vs. Edgewise Therapeutics |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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