Correlation Between Cboe UK and HSBC SP
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By analyzing existing cross correlation between Cboe UK Consumer and HSBC SP 500, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and HSBC SP.
Diversification Opportunities for Cboe UK and HSBC SP
Almost no diversification
The 3 months correlation between Cboe and HSBC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer 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 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 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 Cboe UK i.e., Cboe UK and HSBC SP go up and down completely randomly.
Pair Corralation between Cboe UK and HSBC SP
Assuming the 90 days trading horizon Cboe UK Consumer is expected to generate 1.04 times more return on investment than HSBC SP. However, Cboe UK is 1.04 times more volatile than HSBC SP 500. It trades about 0.48 of its potential returns per unit of risk. HSBC SP 500 is currently generating about 0.27 per unit of risk. If you would invest 2,925,026 in Cboe UK Consumer on August 30, 2024 and sell it today you would earn a total of 336,221 from holding Cboe UK Consumer or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cboe UK Consumer vs. HSBC SP 500
Performance |
| Timeline |
Cboe UK and HSBC SP Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
HSBC SP 500
Pair trading matchups for HSBC SP
Pair Trading with Cboe UK and HSBC SP
The main advantage of trading using opposite Cboe UK and HSBC SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Southern Copper Corp | Cboe UK vs. Made Tech Group | Cboe UK vs. Wheaton Precious Metals | Cboe UK vs. TechnipFMC PLC |
| HSBC SP vs. HSBC FTSE EPRA | HSBC SP vs. HSBC MSCI Emerging | HSBC SP vs. HSBC NASDAQ Global | HSBC SP vs. HSBC MSCI USA |
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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