Correlation Between EFG International and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both EFG International 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 EFG International and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EFG International AG and HSBC Holdings PLC, you can compare the effects of market volatilities on EFG International 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 EFG International with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EFG International and HSBC Holdings.
Diversification Opportunities for EFG International and HSBC Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EFG and HSBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EFG International AG 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 EFG International 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 EFG International AG 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 EFG International i.e., EFG International and HSBC Holdings go up and down completely randomly.
Pair Corralation between EFG International and HSBC Holdings
If you would invest 4,254 in HSBC Holdings PLC on September 19, 2024 and sell it today you would earn a total of 610.00 from holding HSBC Holdings PLC or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EFG International AG vs. HSBC Holdings PLC
Performance |
| Timeline |
| EFG International |
| HSBC Holdings PLC |
EFG International and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EFG International and HSBC Holdings
The main advantage of trading using opposite EFG International and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EFG International 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.| EFG International vs. Bank of America | EFG International vs. Citigroup | EFG International vs. JPMorgan Chase Co | EFG International vs. Wells Fargo |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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