Correlation Between HSBC Holdings and Vibra Energia
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Vibra Energia 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 Vibra Energia 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 Vibra Energia SA, you can compare the effects of market volatilities on HSBC Holdings and Vibra Energia 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 Vibra Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Vibra Energia.
Diversification Opportunities for HSBC Holdings and Vibra Energia
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSBC and Vibra is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Vibra Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vibra Energia 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 Vibra Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vibra Energia SA has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Vibra Energia go up and down completely randomly.
Pair Corralation between HSBC Holdings and Vibra Energia
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.98 times more return on investment than Vibra Energia. However, HSBC Holdings plc is 1.02 times less risky than Vibra Energia. It trades about 0.13 of its potential returns per unit of risk. Vibra Energia SA is currently generating about 0.01 per unit of risk. If you would invest 4,370 in HSBC Holdings plc on September 3, 2024 and sell it today you would earn a total of 2,685 from holding HSBC Holdings plc or generate 61.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
HSBC Holdings plc vs. Vibra Energia SA
Performance |
| Timeline |
| HSBC Holdings plc |
| Vibra Energia SA |
HSBC Holdings and Vibra Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Vibra Energia
The main advantage of trading using opposite HSBC Holdings and Vibra Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Vibra Energia 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 Vibra Energia will offset losses from the drop in Vibra Energia's long position.| HSBC Holdings vs. Uber Technologies | HSBC Holdings vs. Agilent Technologies | HSBC Holdings vs. Dell Technologies | HSBC Holdings vs. Palantir Technologies |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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