Correlation Between SSgA SPDR and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and HSBC MSCI 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 SSgA SPDR and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA SPDR ETFs and HSBC MSCI USA, you can compare the effects of market volatilities on SSgA SPDR and HSBC MSCI 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 SSgA SPDR with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and HSBC MSCI.
Diversification Opportunities for SSgA SPDR and HSBC MSCI
Very poor diversification
The 3 months correlation between SSgA and HSBC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and HSBC MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI USA and SSgA SPDR 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 SSgA SPDR ETFs are associated (or correlated) with HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI USA has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and HSBC MSCI go up and down completely randomly.
Pair Corralation between SSgA SPDR and HSBC MSCI
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.61 times more return on investment than HSBC MSCI. However, SSgA SPDR ETFs is 1.64 times less risky than HSBC MSCI. It trades about 0.14 of its potential returns per unit of risk. HSBC MSCI USA is currently generating about 0.05 per unit of risk. If you would invest 5,224 in SSgA SPDR ETFs on October 20, 2024 and sell it today you would earn a total of 58.00 from holding SSgA SPDR ETFs or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. HSBC MSCI USA
Performance |
| Timeline |
| SSgA SPDR ETFs |
| HSBC MSCI USA |
SSgA SPDR and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and HSBC MSCI
The main advantage of trading using opposite SSgA SPDR and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, HSBC MSCI 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 MSCI will offset losses from the drop in HSBC MSCI's long position.| SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs |
| HSBC MSCI vs. Lyxor UCITS Japan | HSBC MSCI vs. Lyxor UCITS Japan | HSBC MSCI vs. Lyxor UCITS Stoxx | HSBC MSCI vs. Amundi CAC 40 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |