Correlation Between Ekinops SA and HSBC SP
Can any of the company-specific risk be diversified away by investing in both Ekinops SA and HSBC SP 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 Ekinops SA and HSBC SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekinops SA and HSBC SP 500, you can compare the effects of market volatilities on Ekinops SA 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 Ekinops SA with a short position of HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekinops SA and HSBC SP.
Diversification Opportunities for Ekinops SA and HSBC SP
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ekinops and HSBC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA 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 Ekinops SA 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 Ekinops SA 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 Ekinops SA i.e., Ekinops SA and HSBC SP go up and down completely randomly.
Pair Corralation between Ekinops SA and HSBC SP
Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the HSBC SP. In addition to that, Ekinops SA is 3.52 times more volatile than HSBC SP 500. It trades about -0.04 of its total potential returns per unit of risk. HSBC SP 500 is currently generating about 0.16 per unit of volatility. If you would invest 4,872 in HSBC SP 500 on September 1, 2024 and sell it today you would earn a total of 911.00 from holding HSBC SP 500 or generate 18.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekinops SA vs. HSBC SP 500
Performance |
| Timeline |
| Ekinops SA |
| HSBC SP 500 |
Ekinops SA and HSBC SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekinops SA and HSBC SP
The main advantage of trading using opposite Ekinops SA and HSBC SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekinops SA 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.| Ekinops SA vs. Claranova SE | Ekinops SA vs. Derichebourg | Ekinops SA vs. Mersen SA | Ekinops SA vs. BigBen Interactive |
| HSBC SP vs. HSBC MSCI China | HSBC SP vs. HSBC Emerging Market | HSBC SP vs. HSBC USA Sustainable | HSBC SP vs. HSBC MSCI Japan |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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