Correlation Between UBS ETF and HSBC Hang
Can any of the company-specific risk be diversified away by investing in both UBS ETF and HSBC Hang 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 UBS ETF and HSBC Hang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF MSCI and HSBC Hang Seng, you can compare the effects of market volatilities on UBS ETF and HSBC Hang 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 UBS ETF with a short position of HSBC Hang. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and HSBC Hang.
Diversification Opportunities for UBS ETF and HSBC Hang
Very good diversification
The 3 months correlation between UBS and HSBC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and HSBC Hang Seng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Hang Seng and UBS ETF 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 UBS ETF MSCI are associated (or correlated) with HSBC Hang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Hang Seng has no effect on the direction of UBS ETF i.e., UBS ETF and HSBC Hang go up and down completely randomly.
Pair Corralation between UBS ETF and HSBC Hang
Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the HSBC Hang. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF MSCI is 4.88 times less risky than HSBC Hang. The etf trades about -0.14 of its potential returns per unit of risk. The HSBC Hang Seng is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 655.00 in HSBC Hang Seng on September 13, 2024 and sell it today you would lose (16.00) from holding HSBC Hang Seng or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.42% |
| Values | Daily Returns |
UBS ETF MSCI vs. HSBC Hang Seng
Performance |
| Timeline |
| UBS ETF MSCI |
| HSBC Hang Seng |
UBS ETF and HSBC Hang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and HSBC Hang
The main advantage of trading using opposite UBS ETF and HSBC Hang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, HSBC Hang 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 Hang will offset losses from the drop in HSBC Hang's long position.The idea behind UBS ETF MSCI and HSBC Hang Seng 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 Hang vs. Baloise Holding AG | HSBC Hang vs. 21Shares Polkadot ETP | HSBC Hang vs. UBS ETF MSCI | HSBC Hang vs. BB Biotech AG |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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