Correlation Between HSBC MSCI and HSBC NASDAQ
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and HSBC NASDAQ 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 MSCI and HSBC NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC MSCI Emerging and HSBC NASDAQ Global, you can compare the effects of market volatilities on HSBC MSCI and HSBC NASDAQ 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 MSCI with a short position of HSBC NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and HSBC NASDAQ.
Diversification Opportunities for HSBC MSCI and HSBC NASDAQ
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HSBC and HSBC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Emerging and HSBC NASDAQ Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC NASDAQ Global and HSBC MSCI 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 MSCI Emerging are associated (or correlated) with HSBC NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC NASDAQ Global has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and HSBC NASDAQ go up and down completely randomly.
Pair Corralation between HSBC MSCI and HSBC NASDAQ
Assuming the 90 days trading horizon HSBC MSCI Emerging is expected to under-perform the HSBC NASDAQ. But the etf apears to be less risky and, when comparing its historical volatility, HSBC MSCI Emerging is 1.17 times less risky than HSBC NASDAQ. The etf trades about -0.13 of its potential returns per unit of risk. The HSBC NASDAQ Global is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 853.00 in HSBC NASDAQ Global on August 26, 2024 and sell it today you would earn a total of 38.00 from holding HSBC NASDAQ Global or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC MSCI Emerging vs. HSBC NASDAQ Global
Performance |
| Timeline |
| HSBC MSCI Emerging |
| HSBC NASDAQ Global |
HSBC MSCI and HSBC NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and HSBC NASDAQ
The main advantage of trading using opposite HSBC MSCI and HSBC NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, HSBC NASDAQ 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 HSBC NASDAQ will offset losses from the drop in HSBC NASDAQ's long position.| HSBC MSCI vs. Scottish Mortgage Investment | HSBC MSCI vs. CT Private Equity | HSBC MSCI vs. Aberdeen New India | HSBC MSCI vs. Invesco Health Care |
| HSBC NASDAQ vs. Vanguard FTSE Developed | HSBC NASDAQ vs. Leverage Shares 2x | HSBC NASDAQ vs. Amundi Index Solutions | HSBC NASDAQ vs. Amundi Index Solutions |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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