Correlation Between HSBC Holdings and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms, you can compare the effects of market volatilities on HSBC Holdings and Orient Telecoms 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 Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Orient Telecoms.
Diversification Opportunities for HSBC Holdings and Orient Telecoms
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between HSBC and Orient is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms 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 Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Orient Telecoms go up and down completely randomly.
Pair Corralation between HSBC Holdings and Orient Telecoms
Assuming the 90 days trading horizon HSBC Holdings PLC is expected to generate 0.81 times more return on investment than Orient Telecoms. However, HSBC Holdings PLC is 1.24 times less risky than Orient Telecoms. It trades about 0.16 of its potential returns per unit of risk. Orient Telecoms is currently generating about -0.02 per unit of risk. If you would invest 65,058 in HSBC Holdings PLC on October 26, 2024 and sell it today you would earn a total of 17,872 from holding HSBC Holdings PLC or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings PLC vs. Orient Telecoms
Performance |
| Timeline |
| HSBC Holdings PLC |
| Orient Telecoms |
HSBC Holdings and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Orient Telecoms
The main advantage of trading using opposite HSBC Holdings and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Orient Telecoms 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 Orient Telecoms will offset losses from the drop in Orient Telecoms' long position.| HSBC Holdings vs. Orient Telecoms | HSBC Holdings vs. Foresight Environmental Infrastructure | HSBC Holdings vs. Zegona Communications Plc | HSBC Holdings vs. Electronic Arts |
| Orient Telecoms vs. bet at home AG | Orient Telecoms vs. Evolution Gaming Group | Orient Telecoms vs. Monster Beverage Corp | Orient Telecoms vs. Fevertree Drinks Plc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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