Correlation Between HSBC Holdings and Hemogenyx Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Hemogenyx Pharmaceuticals 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 Holdings and Hemogenyx Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings PLC and Hemogenyx Pharmaceuticals PLC, you can compare the effects of market volatilities on HSBC Holdings and Hemogenyx Pharmaceuticals 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 Holdings with a short position of Hemogenyx Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Hemogenyx Pharmaceuticals.
Diversification Opportunities for HSBC Holdings and Hemogenyx Pharmaceuticals
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and Hemogenyx is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Hemogenyx Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemogenyx Pharmaceuticals and HSBC Holdings 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 Holdings PLC are associated (or correlated) with Hemogenyx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemogenyx Pharmaceuticals has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Hemogenyx Pharmaceuticals go up and down completely randomly.
Pair Corralation between HSBC Holdings and Hemogenyx Pharmaceuticals
Assuming the 90 days trading horizon HSBC Holdings PLC is expected to generate 0.2 times more return on investment than Hemogenyx Pharmaceuticals. However, HSBC Holdings PLC is 4.88 times less risky than Hemogenyx Pharmaceuticals. It trades about 0.09 of its potential returns per unit of risk. Hemogenyx Pharmaceuticals PLC is currently generating about -0.02 per unit of risk. If you would invest 66,709 in HSBC Holdings PLC on September 23, 2024 and sell it today you would earn a total of 9,371 from holding HSBC Holdings PLC or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings PLC vs. Hemogenyx Pharmaceuticals PLC
Performance |
| Timeline |
| HSBC Holdings PLC |
| Hemogenyx Pharmaceuticals |
HSBC Holdings and Hemogenyx Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Hemogenyx Pharmaceuticals
The main advantage of trading using opposite HSBC Holdings and Hemogenyx Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals will offset losses from the drop in Hemogenyx Pharmaceuticals' long position.| HSBC Holdings vs. Samsung Electronics Co | HSBC Holdings vs. Samsung Electronics Co | HSBC Holdings vs. Hyundai Motor | HSBC Holdings vs. Toyota Motor Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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