Correlation Between Edinburgh Worldwide and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Edinburgh Worldwide 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 Edinburgh Worldwide and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edinburgh Worldwide Investment and HSBC MSCI USA, you can compare the effects of market volatilities on Edinburgh Worldwide 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 Edinburgh Worldwide with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edinburgh Worldwide and HSBC MSCI.
Diversification Opportunities for Edinburgh Worldwide and HSBC MSCI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edinburgh and HSBC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Worldwide Investment 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 Edinburgh Worldwide 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 Edinburgh Worldwide Investment 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 Edinburgh Worldwide i.e., Edinburgh Worldwide and HSBC MSCI go up and down completely randomly.
Pair Corralation between Edinburgh Worldwide and HSBC MSCI
Assuming the 90 days trading horizon Edinburgh Worldwide Investment is expected to under-perform the HSBC MSCI. In addition to that, Edinburgh Worldwide is 1.51 times more volatile than HSBC MSCI USA. It trades about -0.26 of its total potential returns per unit of risk. HSBC MSCI USA is currently generating about -0.34 per unit of volatility. If you would invest 2,529 in HSBC MSCI USA on November 28, 2024 and sell it today you would lose (172.00) from holding HSBC MSCI USA or give up 6.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edinburgh Worldwide Investment vs. HSBC MSCI USA
Performance |
| Timeline |
| Edinburgh Worldwide |
| HSBC MSCI USA |
Edinburgh Worldwide and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edinburgh Worldwide and HSBC MSCI
The main advantage of trading using opposite Edinburgh Worldwide and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edinburgh Worldwide 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.| Edinburgh Worldwide vs. BlackRock Latin American | Edinburgh Worldwide vs. VinaCapital Vietnam Opportunity | Edinburgh Worldwide vs. iShares MSCI Japan | Edinburgh Worldwide vs. Amundi EUR High |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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