Correlation Between HSBC MSCI and UBS ETF
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and UBS ETF 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 UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC MSCI Indonesia and UBS ETF plc, you can compare the effects of market volatilities on HSBC MSCI and UBS ETF 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 UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and UBS ETF.
Diversification Opportunities for HSBC MSCI and UBS ETF
Significant diversification
The 3 months correlation between HSBC and UBS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Indonesia and UBS ETF plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF plc 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 Indonesia are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF plc has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and UBS ETF go up and down completely randomly.
Pair Corralation between HSBC MSCI and UBS ETF
Assuming the 90 days trading horizon HSBC MSCI Indonesia is expected to under-perform the UBS ETF. In addition to that, HSBC MSCI is 2.44 times more volatile than UBS ETF plc. It trades about -0.25 of its total potential returns per unit of risk. UBS ETF plc is currently generating about -0.11 per unit of volatility. If you would invest 1,432 in UBS ETF plc on November 28, 2024 and sell it today you would lose (23.00) from holding UBS ETF plc or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC MSCI Indonesia vs. UBS ETF plc
Performance |
| Timeline |
| HSBC MSCI Indonesia |
| UBS ETF plc |
HSBC MSCI and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and UBS ETF
The main advantage of trading using opposite HSBC MSCI and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, UBS ETF 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 UBS ETF will offset losses from the drop in UBS ETF's long position.| HSBC MSCI vs. HSBC USA SUSTAINABLE | HSBC MSCI vs. HSBC MSCI Europe | HSBC MSCI vs. HSBC EMERGING MARKET | HSBC MSCI vs. HSBC MSCI Japan |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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