Correlation Between HSBC Holdings and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on HSBC Holdings and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Uber Technologies.
Diversification Opportunities for HSBC Holdings and Uber Technologies
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSBC and Uber is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Uber Technologies go up and down completely randomly.
Pair Corralation between HSBC Holdings and Uber Technologies
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.62 times more return on investment than Uber Technologies. However, HSBC Holdings plc is 1.61 times less risky than Uber Technologies. It trades about 0.11 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.01 per unit of risk. If you would invest 3,296 in HSBC Holdings plc on November 5, 2024 and sell it today you would earn a total of 1,704 from holding HSBC Holdings plc or generate 51.7% 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. Uber Technologies
Performance |
| Timeline |
| HSBC Holdings plc |
| Uber Technologies |
HSBC Holdings and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Uber Technologies
The main advantage of trading using opposite HSBC Holdings and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| HSBC Holdings vs. COPLAND ROAD CAPITAL | HSBC Holdings vs. NAGOYA RAILROAD | HSBC Holdings vs. HEALTHSTREAM | HSBC Holdings vs. Gold Road Resources |
| Uber Technologies vs. MAGNUM MINING EXP | Uber Technologies vs. Waste Management | Uber Technologies vs. Cardinal Health | Uber Technologies vs. STGEORGE MINING LTD |
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 CEOs Directory module to screen CEOs from public companies around the world.
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