Correlation Between HSBC Holdings and Secure Property
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Secure Property 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 Secure Property 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 Secure Property Development, you can compare the effects of market volatilities on HSBC Holdings and Secure Property 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 Secure Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Secure Property.
Diversification Opportunities for HSBC Holdings and Secure Property
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSBC and Secure is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Secure Property Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Property Deve 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 Secure Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Property Deve has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Secure Property go up and down completely randomly.
Pair Corralation between HSBC Holdings and Secure Property
Assuming the 90 days trading horizon HSBC Holdings PLC is expected to generate 0.84 times more return on investment than Secure Property. However, HSBC Holdings PLC is 1.18 times less risky than Secure Property. It trades about 0.08 of its potential returns per unit of risk. Secure Property Development is currently generating about -0.03 per unit of risk. If you would invest 51,866 in HSBC Holdings PLC on November 2, 2024 and sell it today you would earn a total of 32,154 from holding HSBC Holdings PLC or generate 61.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
HSBC Holdings PLC vs. Secure Property Development
Performance |
| Timeline |
| HSBC Holdings PLC |
| Secure Property Deve |
HSBC Holdings and Secure Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Secure Property
The main advantage of trading using opposite HSBC Holdings and Secure Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Secure Property 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 Secure Property will offset losses from the drop in Secure Property's long position.| HSBC Holdings vs. Air Products Chemicals | HSBC Holdings vs. Raymond James Financial | HSBC Holdings vs. Discover Financial Services | HSBC Holdings vs. Westlake Chemical Corp |
| Secure Property vs. Gaming Realms plc | Secure Property vs. Lindsell Train Investment | Secure Property vs. Fulcrum Metals PLC | Secure Property vs. Golden Metal Resources |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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