Correlation Between HSBC MSCI and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and WisdomTree Emerging 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 WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC MSCI KOREA and WisdomTree Emerging Markets, you can compare the effects of market volatilities on HSBC MSCI and WisdomTree Emerging 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 WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and WisdomTree Emerging.
Diversification Opportunities for HSBC MSCI and WisdomTree Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HSBC and WisdomTree is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI KOREA and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 KOREA are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between HSBC MSCI and WisdomTree Emerging
Assuming the 90 days trading horizon HSBC MSCI KOREA is expected to generate 2.77 times more return on investment than WisdomTree Emerging. However, HSBC MSCI is 2.77 times more volatile than WisdomTree Emerging Markets. It trades about 0.39 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.14 per unit of risk. If you would invest 6,989 in HSBC MSCI KOREA on November 21, 2025 and sell it today you would earn a total of 4,241 from holding HSBC MSCI KOREA or generate 60.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC MSCI KOREA vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| HSBC MSCI KOREA |
| WisdomTree Emerging |
HSBC MSCI and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and WisdomTree Emerging
The main advantage of trading using opposite HSBC MSCI and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| HSBC MSCI vs. HSBC USA Screened | HSBC MSCI vs. HSBC MSCI Europe | HSBC MSCI vs. HSBC Emerging Market | HSBC MSCI vs. HSBC MSCI Japan |
| WisdomTree Emerging vs. iShares MSCI USA | WisdomTree Emerging vs. Invesco EQQQ NASDAQ 100 | WisdomTree Emerging vs. iShares VII PLC | WisdomTree Emerging vs. iShares MSCI North |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |