Correlation Between HSBC Holdings and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and MAHLE Metal 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 MAHLE Metal 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 MAHLE Metal Leve, you can compare the effects of market volatilities on HSBC Holdings and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and MAHLE Metal.
Diversification Opportunities for HSBC Holdings and MAHLE Metal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and MAHLE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and MAHLE Metal go up and down completely randomly.
Pair Corralation between HSBC Holdings and MAHLE Metal
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.94 times more return on investment than MAHLE Metal. However, HSBC Holdings plc is 1.06 times less risky than MAHLE Metal. It trades about 0.18 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.12 per unit of risk. If you would invest 6,201 in HSBC Holdings plc on August 27, 2024 and sell it today you would earn a total of 589.00 from holding HSBC Holdings plc or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. MAHLE Metal Leve
Performance |
| Timeline |
| HSBC Holdings plc |
| MAHLE Metal Leve |
HSBC Holdings and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and MAHLE Metal
The main advantage of trading using opposite HSBC Holdings and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| HSBC Holdings vs. BTG Pactual Logstica | HSBC Holdings vs. Plano Plano Desenvolvimento | HSBC Holdings vs. Cable One | HSBC Holdings vs. ATMA Participaes SA |
| MAHLE Metal vs. Baidu Inc | MAHLE Metal vs. Deutsche Bank Aktiengesellschaft | MAHLE Metal vs. HSBC Holdings plc | MAHLE Metal vs. The Bank of |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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