Correlation Between Cboe UK and HSBC Holdings
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By analyzing existing cross correlation between Cboe UK Consumer and HSBC Holdings PLC, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and HSBC Holdings.
Diversification Opportunities for Cboe UK and HSBC Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cboe and HSBC is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer 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 Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and HSBC Holdings go up and down completely randomly.
Pair Corralation between Cboe UK and HSBC Holdings
Assuming the 90 days trading horizon Cboe UK Consumer is expected to under-perform the HSBC Holdings. In addition to that, Cboe UK is 1.34 times more volatile than HSBC Holdings PLC. It trades about -0.04 of its total potential returns per unit of risk. HSBC Holdings PLC is currently generating about 0.28 per unit of volatility. If you would invest 73,370 in HSBC Holdings PLC on September 24, 2024 and sell it today you would earn a total of 2,710 from holding HSBC Holdings PLC or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. HSBC Holdings PLC
Performance |
| Timeline |
Cboe UK and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
HSBC Holdings PLC
Pair trading matchups for HSBC Holdings
Pair Trading with Cboe UK and HSBC Holdings
The main advantage of trading using opposite Cboe UK and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. AMG Advanced Metallurgical | Cboe UK vs. Bloomsbury Publishing Plc | Cboe UK vs. CleanTech Lithium plc | Cboe UK vs. Fulcrum Metals PLC |
| HSBC Holdings vs. Oxford Technology 2 | HSBC Holdings vs. The Mercantile Investment | HSBC Holdings vs. Odyssean Investment Trust | HSBC Holdings vs. Albion Technology General |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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