Correlation Between HSBC Holdings and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and MCEWEN MINING 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 MCEWEN MINING 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 MCEWEN MINING INC, you can compare the effects of market volatilities on HSBC Holdings and MCEWEN MINING 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 MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and MCEWEN MINING.
Diversification Opportunities for HSBC Holdings and MCEWEN MINING
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and MCEWEN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and MCEWEN MINING go up and down completely randomly.
Pair Corralation between HSBC Holdings and MCEWEN MINING
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.3 times more return on investment than MCEWEN MINING. However, HSBC Holdings plc is 3.35 times less risky than MCEWEN MINING. It trades about 0.17 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.03 per unit of risk. If you would invest 4,580 in HSBC Holdings plc on October 9, 2024 and sell it today you would earn a total of 120.00 from holding HSBC Holdings plc or generate 2.62% 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. MCEWEN MINING INC
Performance |
| Timeline |
| HSBC Holdings plc |
| MCEWEN MINING INC |
HSBC Holdings and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and MCEWEN MINING
The main advantage of trading using opposite HSBC Holdings and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.| HSBC Holdings vs. Goodyear Tire Rubber | HSBC Holdings vs. Air Transport Services | HSBC Holdings vs. Plastic Omnium | HSBC Holdings vs. DICKS Sporting Goods |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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