Correlation Between HSBC Holdings and PDG Realty
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and PDG Realty 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 PDG Realty 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 PDG Realty SA, you can compare the effects of market volatilities on HSBC Holdings and PDG Realty 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 PDG Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and PDG Realty.
Diversification Opportunities for HSBC Holdings and PDG Realty
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and PDG is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and PDG Realty SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDG Realty SA 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 PDG Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDG Realty SA has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and PDG Realty go up and down completely randomly.
Pair Corralation between HSBC Holdings and PDG Realty
If you would invest 6,606 in HSBC Holdings plc on August 31, 2024 and sell it today you would earn a total of 334.00 from holding HSBC Holdings plc or generate 5.06% 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. PDG Realty SA
Performance |
| Timeline |
| HSBC Holdings plc |
| PDG Realty SA |
HSBC Holdings and PDG Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and PDG Realty
The main advantage of trading using opposite HSBC Holdings and PDG Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, PDG Realty 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 PDG Realty will offset losses from the drop in PDG Realty's long position.| HSBC Holdings vs. Unifique Telecomunicaes SA | HSBC Holdings vs. Charter Communications | HSBC Holdings vs. G2D Investments | HSBC Holdings vs. Taiwan Semiconductor Manufacturing |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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