Correlation Between HSBC Holdings and Methode Electronics
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By analyzing existing cross correlation between HSBC Holdings plc and Methode Electronics, you can compare the effects of market volatilities on HSBC Holdings and Methode Electronics 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 Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Methode Electronics.
Diversification Opportunities for HSBC Holdings and Methode Electronics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between HSBC and Methode is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics 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 Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Methode Electronics go up and down completely randomly.
Pair Corralation between HSBC Holdings and Methode Electronics
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.36 times more return on investment than Methode Electronics. However, HSBC Holdings plc is 2.75 times less risky than Methode Electronics. It trades about 0.08 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.06 per unit of risk. If you would invest 562.00 in HSBC Holdings plc on September 3, 2024 and sell it today you would earn a total of 332.00 from holding HSBC Holdings plc or generate 59.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Methode Electronics
Performance |
| Timeline |
| HSBC Holdings plc |
| Methode Electronics |
HSBC Holdings and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Methode Electronics
The main advantage of trading using opposite HSBC Holdings and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| HSBC Holdings vs. NorAm Drilling AS | HSBC Holdings vs. SIEM OFFSHORE NEW | HSBC Holdings vs. BORR DRILLING NEW | HSBC Holdings vs. Pembina Pipeline Corp |
| Methode Electronics vs. Hon Hai Precision | Methode Electronics vs. Samsung SDI Co | Methode Electronics vs. Murata Manufacturing Co | Methode Electronics vs. Mitsubishi Electric |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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