Correlation Between HSBC Holdings and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Oxford Technology 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 Oxford Technology 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 Oxford Technology 2, you can compare the effects of market volatilities on HSBC Holdings and Oxford Technology 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 Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Oxford Technology.
Diversification Opportunities for HSBC Holdings and Oxford Technology
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSBC and Oxford is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology 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 Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Oxford Technology go up and down completely randomly.
Pair Corralation between HSBC Holdings and Oxford Technology
Assuming the 90 days trading horizon HSBC Holdings PLC is expected to generate 0.7 times more return on investment than Oxford Technology. However, HSBC Holdings PLC is 1.43 times less risky than Oxford Technology. It trades about 0.09 of its potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.18 per unit of risk. If you would invest 66,816 in HSBC Holdings PLC on September 24, 2024 and sell it today you would earn a total of 9,264 from holding HSBC Holdings PLC or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
HSBC Holdings PLC vs. Oxford Technology 2
Performance |
| Timeline |
| HSBC Holdings PLC |
| Oxford Technology |
HSBC Holdings and Oxford Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Oxford Technology
The main advantage of trading using opposite HSBC Holdings and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Oxford Technology 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.| HSBC Holdings vs. Oxford Technology 2 | HSBC Holdings vs. The Mercantile Investment | HSBC Holdings vs. Odyssean Investment Trust | HSBC Holdings vs. Albion Technology General |
| Oxford Technology vs. Ecclesiastical Insurance Office | Oxford Technology vs. Atalaya Mining | Oxford Technology vs. Beowulf Mining | Oxford Technology vs. Invesco Physical Silver |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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