Correlation Between HSBC Holdings and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and NEXA RESOURCES 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 NEXA RESOURCES 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 NEXA RESOURCES SA, you can compare the effects of market volatilities on HSBC Holdings and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and NEXA RESOURCES.
Diversification Opportunities for HSBC Holdings and NEXA RESOURCES
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and NEXA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between HSBC Holdings and NEXA RESOURCES
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.62 times more return on investment than NEXA RESOURCES. However, HSBC Holdings plc is 1.61 times less risky than NEXA RESOURCES. It trades about 0.11 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about 0.0 per unit of risk. If you would invest 3,259 in HSBC Holdings plc on November 9, 2024 and sell it today you would earn a total of 1,701 from holding HSBC Holdings plc or generate 52.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
HSBC Holdings plc vs. NEXA RESOURCES SA
Performance |
| Timeline |
| HSBC Holdings plc |
| NEXA RESOURCES SA |
HSBC Holdings and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and NEXA RESOURCES
The main advantage of trading using opposite HSBC Holdings and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES's long position.| HSBC Holdings vs. PSI Software AG | HSBC Holdings vs. Constellation Software | HSBC Holdings vs. FORMPIPE SOFTWARE AB | HSBC Holdings vs. Alfa Financial Software |
| NEXA RESOURCES vs. Marie Brizard Wine | NEXA RESOURCES vs. Treasury Wine Estates | NEXA RESOURCES vs. Universal Health Realty | NEXA RESOURCES vs. COREBRIDGE FINANCIAL 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |