Correlation Between HSBC Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on HSBC Holdings and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Dow Jones.
Diversification Opportunities for HSBC Holdings and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSBC and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between HSBC Holdings and Dow Jones
If you would invest 4,156,308 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 315,898 from holding Dow Jones Industrial or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
HSBC Holdings plc vs. Dow Jones Industrial
Performance |
| Timeline |
HSBC Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HSBC Holdings plc
Pair trading matchups for HSBC Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HSBC Holdings and Dow Jones
The main advantage of trading using opposite HSBC Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| HSBC Holdings vs. Unifique Telecomunicaes SA | HSBC Holdings vs. Charter Communications | HSBC Holdings vs. G2D Investments | HSBC Holdings vs. Taiwan Semiconductor Manufacturing |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |