Correlation Between HSBC SP and Amundi Stoxx
Can any of the company-specific risk be diversified away by investing in both HSBC SP and Amundi Stoxx 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 SP and Amundi Stoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC SP 500 and Amundi Stoxx Europe, you can compare the effects of market volatilities on HSBC SP and Amundi Stoxx 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 SP with a short position of Amundi Stoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC SP and Amundi Stoxx.
Diversification Opportunities for HSBC SP and Amundi Stoxx
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSBC and Amundi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HSBC SP 500 and Amundi Stoxx Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Stoxx Europe and HSBC SP 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 SP 500 are associated (or correlated) with Amundi Stoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Stoxx Europe has no effect on the direction of HSBC SP i.e., HSBC SP and Amundi Stoxx go up and down completely randomly.
Pair Corralation between HSBC SP and Amundi Stoxx
Assuming the 90 days trading horizon HSBC SP 500 is expected to generate 1.11 times more return on investment than Amundi Stoxx. However, HSBC SP is 1.11 times more volatile than Amundi Stoxx Europe. It trades about 0.11 of its potential returns per unit of risk. Amundi Stoxx Europe is currently generating about 0.06 per unit of risk. If you would invest 3,705 in HSBC SP 500 on August 27, 2024 and sell it today you would earn a total of 2,091 from holding HSBC SP 500 or generate 56.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC SP 500 vs. Amundi Stoxx Europe
Performance |
| Timeline |
| HSBC SP 500 |
| Amundi Stoxx Europe |
HSBC SP and Amundi Stoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC SP and Amundi Stoxx
The main advantage of trading using opposite HSBC SP and Amundi Stoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC SP position performs unexpectedly, Amundi Stoxx 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 Amundi Stoxx will offset losses from the drop in Amundi Stoxx's long position.| HSBC SP vs. Lyxor UCITS Japan | HSBC SP vs. Lyxor UCITS Stoxx | HSBC SP vs. Xtrackers MSCI Europe | HSBC SP vs. SPDR SP 500 |
| Amundi Stoxx vs. Lyxor UCITS Japan | Amundi Stoxx vs. Lyxor UCITS Stoxx | Amundi Stoxx vs. Xtrackers MSCI Europe | Amundi Stoxx vs. SPDR SP 500 |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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