Correlation Between HSBC SP and ETHetc ETC
Can any of the company-specific risk be diversified away by investing in both HSBC SP and ETHetc ETC 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 ETHetc ETC 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 ETHetc ETC, you can compare the effects of market volatilities on HSBC SP and ETHetc ETC 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 ETHetc ETC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC SP and ETHetc ETC.
Diversification Opportunities for HSBC SP and ETHetc ETC
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HSBC and ETHetc is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding HSBC SP 500 and ETHetc ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETHetc ETC 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 ETHetc ETC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETHetc ETC has no effect on the direction of HSBC SP i.e., HSBC SP and ETHetc ETC go up and down completely randomly.
Pair Corralation between HSBC SP and ETHetc ETC
Assuming the 90 days trading horizon HSBC SP is expected to generate 2.27 times less return on investment than ETHetc ETC. But when comparing it to its historical volatility, HSBC SP 500 is 5.06 times less risky than ETHetc ETC. It trades about 0.16 of its potential returns per unit of risk. ETHetc ETC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,046 in ETHetc ETC on September 20, 2024 and sell it today you would earn a total of 1,434 from holding ETHetc ETC or generate 70.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC SP 500 vs. ETHetc ETC
Performance |
| Timeline |
| HSBC SP 500 |
| ETHetc ETC |
HSBC SP and ETHetc ETC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC SP and ETHetc ETC
The main advantage of trading using opposite HSBC SP and ETHetc ETC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC SP position performs unexpectedly, ETHetc ETC 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 ETHetc ETC will offset losses from the drop in ETHetc ETC's long position.| HSBC SP vs. Lyxor UCITS Japan | HSBC SP vs. Lyxor UCITS Japan | HSBC SP vs. Lyxor UCITS Stoxx | HSBC SP vs. Gold Bullion Securities |
| ETHetc ETC vs. Amundi Index Solutions | ETHetc ETC vs. Multi Units Luxembourg | ETHetc ETC vs. iShares Digital Entertainment | ETHetc ETC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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