Correlation Between IShares Treasury and HSBC Emerging
Can any of the company-specific risk be diversified away by investing in both IShares Treasury and HSBC Emerging 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 IShares Treasury and HSBC Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Treasury Bond and HSBC Emerging Market, you can compare the effects of market volatilities on IShares Treasury and HSBC Emerging 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 IShares Treasury with a short position of HSBC Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and HSBC Emerging.
Diversification Opportunities for IShares Treasury and HSBC Emerging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and HSBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Bond and HSBC Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Emerging Market and IShares Treasury 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 iShares Treasury Bond are associated (or correlated) with HSBC Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Emerging Market has no effect on the direction of IShares Treasury i.e., IShares Treasury and HSBC Emerging go up and down completely randomly.
Pair Corralation between IShares Treasury and HSBC Emerging
If you would invest 1,322 in HSBC Emerging Market on September 2, 2024 and sell it today you would earn a total of 202.00 from holding HSBC Emerging Market or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
iShares Treasury Bond vs. HSBC Emerging Market
Performance |
| Timeline |
| iShares Treasury Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HSBC Emerging Market |
IShares Treasury and HSBC Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Treasury and HSBC Emerging
The main advantage of trading using opposite IShares Treasury and HSBC Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury position performs unexpectedly, HSBC Emerging 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 Emerging will offset losses from the drop in HSBC Emerging's long position.| IShares Treasury vs. iShares MSCI Japan | IShares Treasury vs. iShares JP Morgan | IShares Treasury vs. iShares MSCI Europe | IShares Treasury vs. iShares Nasdaq Biotechnology |
| HSBC Emerging vs. HSBC FTSE EPRA | HSBC Emerging vs. HSBC SP 500 | HSBC Emerging vs. HSBC MSCI Emerging | HSBC Emerging vs. HSBC NASDAQ Global |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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