Correlation Between HSBC NASDAQ and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both HSBC NASDAQ and HSBC MSCI 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 NASDAQ and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC NASDAQ Global and HSBC MSCI Emerging, you can compare the effects of market volatilities on HSBC NASDAQ and HSBC MSCI 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 NASDAQ with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC NASDAQ and HSBC MSCI.
Diversification Opportunities for HSBC NASDAQ and HSBC MSCI
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between HSBC and HSBC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HSBC NASDAQ Global and HSBC MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI Emerging and HSBC NASDAQ 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 NASDAQ Global are associated (or correlated) with HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI Emerging has no effect on the direction of HSBC NASDAQ i.e., HSBC NASDAQ and HSBC MSCI go up and down completely randomly.
Pair Corralation between HSBC NASDAQ and HSBC MSCI
Assuming the 90 days trading horizon HSBC NASDAQ Global is expected to under-perform the HSBC MSCI. In addition to that, HSBC NASDAQ is 1.66 times more volatile than HSBC MSCI Emerging. It trades about -0.01 of its total potential returns per unit of risk. HSBC MSCI Emerging is currently generating about 0.04 per unit of volatility. If you would invest 1,729 in HSBC MSCI Emerging on August 30, 2024 and sell it today you would earn a total of 333.00 from holding HSBC MSCI Emerging or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.95% |
| Values | Daily Returns |
HSBC NASDAQ Global vs. HSBC MSCI Emerging
Performance |
| Timeline |
| HSBC NASDAQ Global |
| HSBC MSCI Emerging |
HSBC NASDAQ and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC NASDAQ and HSBC MSCI
The main advantage of trading using opposite HSBC NASDAQ and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC NASDAQ position performs unexpectedly, HSBC MSCI 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 MSCI will offset losses from the drop in HSBC MSCI's long position.| HSBC NASDAQ vs. Vanguard FTSE Developed | HSBC NASDAQ vs. Leverage Shares 2x | HSBC NASDAQ vs. Amundi Index Solutions | HSBC NASDAQ vs. Amundi Index Solutions |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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