Correlation Between HSBC Holdings and SBM OFFSHORE
Specify exactly 2 symbols:
By analyzing existing cross correlation between HSBC Holdings plc and SBM OFFSHORE, you can compare the effects of market volatilities on HSBC Holdings and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and SBM OFFSHORE.
Diversification Opportunities for HSBC Holdings and SBM OFFSHORE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HSBC and SBM is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between HSBC Holdings and SBM OFFSHORE
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.9 times more return on investment than SBM OFFSHORE. However, HSBC Holdings plc is 1.11 times less risky than SBM OFFSHORE. It trades about 0.09 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.04 per unit of risk. If you would invest 497.00 in HSBC Holdings plc on September 12, 2024 and sell it today you would earn a total of 418.00 from holding HSBC Holdings plc or generate 84.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. SBM OFFSHORE
Performance |
| Timeline |
| HSBC Holdings plc |
| SBM OFFSHORE |
HSBC Holdings and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and SBM OFFSHORE
The main advantage of trading using opposite HSBC Holdings and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| HSBC Holdings vs. Dave Busters Entertainment | HSBC Holdings vs. COMMERCIAL VEHICLE | HSBC Holdings vs. GigaMedia | HSBC Holdings vs. CarsalesCom |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |