Correlation Between HSBC MSCI and HSBC Hang
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and HSBC Hang 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 Hang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC MSCI Europe and HSBC Hang Seng, you can compare the effects of market volatilities on HSBC MSCI and HSBC Hang 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 Hang. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and HSBC Hang.
Diversification Opportunities for HSBC MSCI and HSBC Hang
Excellent diversification
The 3 months correlation between HSBC and HSBC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Europe and HSBC Hang Seng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Hang Seng 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 Europe are associated (or correlated) with HSBC Hang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Hang Seng has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and HSBC Hang go up and down completely randomly.
Pair Corralation between HSBC MSCI and HSBC Hang
Assuming the 90 days trading horizon HSBC MSCI Europe is expected to under-perform the HSBC Hang. But the etf apears to be less risky and, when comparing its historical volatility, HSBC MSCI Europe is 4.91 times less risky than HSBC Hang. The etf trades about -0.06 of its potential returns per unit of risk. The HSBC Hang Seng is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 480.00 in HSBC Hang Seng on September 12, 2024 and sell it today you would earn a total of 193.00 from holding HSBC Hang Seng or generate 40.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
HSBC MSCI Europe vs. HSBC Hang Seng
Performance |
| Timeline |
| HSBC MSCI Europe |
| HSBC Hang Seng |
HSBC MSCI and HSBC Hang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and HSBC Hang
The main advantage of trading using opposite HSBC MSCI and HSBC Hang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, HSBC Hang 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 Hang will offset losses from the drop in HSBC Hang's long position.| HSBC MSCI vs. HSBC USA SUSTAINABLE | HSBC MSCI vs. HSBC EMERGING MARKET | HSBC MSCI vs. HSBC MSCI Japan | HSBC MSCI vs. HSBC DEVELOPED WORLD |
| HSBC Hang vs. Baloise Holding AG | HSBC Hang vs. 21Shares Polkadot ETP | HSBC Hang vs. UBS ETF MSCI | HSBC Hang vs. BB Biotech AG |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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