Correlation Between HSBC Holdings and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Acadia Realty 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 Acadia Realty 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 Acadia Realty Trust, you can compare the effects of market volatilities on HSBC Holdings and Acadia Realty 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 Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Acadia Realty.
Diversification Opportunities for HSBC Holdings and Acadia Realty
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSBC and Acadia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Acadia Realty go up and down completely randomly.
Pair Corralation between HSBC Holdings and Acadia Realty
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.67 times more return on investment than Acadia Realty. However, HSBC Holdings plc is 1.49 times less risky than Acadia Realty. It trades about 0.22 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.04 per unit of risk. If you would invest 4,700 in HSBC Holdings plc on November 7, 2024 and sell it today you would earn a total of 260.00 from holding HSBC Holdings plc or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
HSBC Holdings plc vs. Acadia Realty Trust
Performance |
| Timeline |
| HSBC Holdings plc |
| Acadia Realty Trust |
HSBC Holdings and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Acadia Realty
The main advantage of trading using opposite HSBC Holdings and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.| HSBC Holdings vs. Coeur Mining | HSBC Holdings vs. MAGNUM MINING EXP | HSBC Holdings vs. GALENA MINING LTD | HSBC Holdings vs. EEDUCATION ALBERT AB |
| Acadia Realty vs. BROADWIND ENRGY | Acadia Realty vs. SPARTAN STORES | Acadia Realty vs. Fukuyama Transporting Co | Acadia Realty vs. COPLAND ROAD CAPITAL |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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