Correlation Between IShares AEX and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both IShares AEX and HSBC MSCI 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 IShares AEX and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares AEX UCITS and HSBC MSCI Japan, you can compare the effects of market volatilities on IShares AEX and HSBC MSCI 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 IShares AEX with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AEX and HSBC MSCI.
Diversification Opportunities for IShares AEX and HSBC MSCI
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and HSBC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding iShares AEX UCITS and HSBC MSCI Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI Japan and IShares AEX 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 iShares AEX UCITS are associated (or correlated) with HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI Japan has no effect on the direction of IShares AEX i.e., IShares AEX and HSBC MSCI go up and down completely randomly.
Pair Corralation between IShares AEX and HSBC MSCI
Assuming the 90 days trading horizon IShares AEX is expected to generate 1.29 times less return on investment than HSBC MSCI. But when comparing it to its historical volatility, iShares AEX UCITS is 1.29 times less risky than HSBC MSCI. It trades about 0.25 of its potential returns per unit of risk. HSBC MSCI Japan is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,745 in HSBC MSCI Japan on September 13, 2024 and sell it today you would earn a total of 180.00 from holding HSBC MSCI Japan or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares AEX UCITS vs. HSBC MSCI Japan
Performance |
| Timeline |
| iShares AEX UCITS |
| HSBC MSCI Japan |
IShares AEX and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AEX and HSBC MSCI
The main advantage of trading using opposite IShares AEX and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AEX position performs unexpectedly, HSBC MSCI 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 MSCI will offset losses from the drop in HSBC MSCI's long position.| IShares AEX vs. Vanguard SP 500 | IShares AEX vs. iShares II Public | IShares AEX vs. Vanguard FTSE All World | IShares AEX vs. iShares SP 500 |
| HSBC MSCI vs. HSBC MSCI China | HSBC MSCI vs. HSBC Emerging Market | HSBC MSCI vs. HSBC USA Sustainable | HSBC MSCI vs. HSBC MUCPAB ETF |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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