Correlation Between HSBC Holdings and Banco BTG
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Banco BTG 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 HSBC Holdings and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings plc and Banco BTG Pactual, you can compare the effects of market volatilities on HSBC Holdings and Banco BTG 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 HSBC Holdings with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Banco BTG.
Diversification Opportunities for HSBC Holdings and Banco BTG
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSBC and Banco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual and HSBC Holdings 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 HSBC Holdings plc are associated (or correlated) with Banco BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Banco BTG go up and down completely randomly.
Pair Corralation between HSBC Holdings and Banco BTG
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.72 times more return on investment than Banco BTG. However, HSBC Holdings plc is 1.39 times less risky than Banco BTG. It trades about 0.11 of its potential returns per unit of risk. Banco BTG Pactual is currently generating about 0.0 per unit of risk. If you would invest 5,731 in HSBC Holdings plc on August 30, 2024 and sell it today you would earn a total of 1,209 from holding HSBC Holdings plc or generate 21.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Banco BTG Pactual
Performance |
| Timeline |
| HSBC Holdings plc |
| Banco BTG Pactual |
HSBC Holdings and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Banco BTG
The main advantage of trading using opposite HSBC Holdings and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Banco BTG 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 Banco BTG will offset losses from the drop in Banco BTG's long position.| HSBC Holdings vs. United Airlines Holdings | HSBC Holdings vs. Ameriprise Financial | HSBC Holdings vs. Deutsche Bank Aktiengesellschaft | HSBC Holdings vs. Mitsubishi UFJ Financial |
| Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco Santander SA | Banco BTG vs. Banco Santander SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |