Correlation Between HSBC USA and HSBC SP
Can any of the company-specific risk be diversified away by investing in both HSBC USA and HSBC SP 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 USA and HSBC SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC USA Sustainable and HSBC SP 500, you can compare the effects of market volatilities on HSBC USA and HSBC SP 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 USA with a short position of HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC USA and HSBC SP.
Diversification Opportunities for HSBC USA and HSBC SP
Very poor diversification
The 3 months correlation between HSBC and HSBC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HSBC USA Sustainable and HSBC SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC SP 500 and HSBC USA 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 USA Sustainable are associated (or correlated) with HSBC SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC SP 500 has no effect on the direction of HSBC USA i.e., HSBC USA and HSBC SP go up and down completely randomly.
Pair Corralation between HSBC USA and HSBC SP
Assuming the 90 days trading horizon HSBC USA Sustainable is expected to generate 0.53 times more return on investment than HSBC SP. However, HSBC USA Sustainable is 1.87 times less risky than HSBC SP. It trades about 0.24 of its potential returns per unit of risk. HSBC SP 500 is currently generating about 0.12 per unit of risk. If you would invest 2,947 in HSBC USA Sustainable on October 23, 2024 and sell it today you would earn a total of 47.00 from holding HSBC USA Sustainable or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC USA Sustainable vs. HSBC SP 500
Performance |
| Timeline |
| HSBC USA Sustainable |
| HSBC SP 500 |
HSBC USA and HSBC SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC USA and HSBC SP
The main advantage of trading using opposite HSBC USA and HSBC SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC USA position performs unexpectedly, HSBC SP 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 SP will offset losses from the drop in HSBC SP's long position.| HSBC USA vs. Lyxor UCITS Japan | HSBC USA vs. Lyxor UCITS Japan | HSBC USA vs. Lyxor UCITS Stoxx | HSBC USA vs. Amundi CAC 40 |
| HSBC SP vs. HSBC MSCI China | HSBC SP vs. HSBC Emerging Market | HSBC SP vs. HSBC USA Sustainable | HSBC SP vs. HSBC MSCI Japan |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |