Correlation Between HSBC Developed and Multi Units
Can any of the company-specific risk be diversified away by investing in both HSBC Developed and Multi Units 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 Developed and Multi Units into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Developed World and Multi Units France, you can compare the effects of market volatilities on HSBC Developed and Multi Units 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 Developed with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Developed and Multi Units.
Diversification Opportunities for HSBC Developed and Multi Units
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSBC and Multi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Developed World and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and HSBC Developed 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 Developed World are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of HSBC Developed i.e., HSBC Developed and Multi Units go up and down completely randomly.
Pair Corralation between HSBC Developed and Multi Units
Assuming the 90 days trading horizon HSBC Developed World is expected to generate 0.65 times more return on investment than Multi Units. However, HSBC Developed World is 1.54 times less risky than Multi Units. It trades about 0.25 of its potential returns per unit of risk. Multi Units France is currently generating about -0.03 per unit of risk. If you would invest 2,145 in HSBC Developed World on September 2, 2024 and sell it today you would earn a total of 212.00 from holding HSBC Developed World or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Developed World vs. Multi Units France
Performance |
| Timeline |
| HSBC Developed World |
| Multi Units France |
HSBC Developed and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Developed and Multi Units
The main advantage of trading using opposite HSBC Developed and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Developed position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| HSBC Developed vs. HSBC MSCI China | HSBC Developed vs. HSBC Emerging Market | HSBC Developed vs. HSBC USA Sustainable | HSBC Developed vs. HSBC MSCI Japan |
| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor MSCI Brazil | Multi Units vs. MULTI UNITS LUXEMBOURG | Multi Units vs. Multi Units France |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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