Correlation Between SBM OFFSHORE and HSBC Holdings
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By analyzing existing cross correlation between SBM OFFSHORE and HSBC Holdings plc, you can compare the effects of market volatilities on SBM OFFSHORE and HSBC Holdings 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 SBM OFFSHORE with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and HSBC Holdings.
Diversification Opportunities for SBM OFFSHORE and HSBC Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and HSBC is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and HSBC Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings plc and SBM OFFSHORE 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 SBM OFFSHORE are associated (or correlated) with HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings plc has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and HSBC Holdings go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and HSBC Holdings
Assuming the 90 days trading horizon SBM OFFSHORE is expected to under-perform the HSBC Holdings. In addition to that, SBM OFFSHORE is 1.8 times more volatile than HSBC Holdings plc. It trades about -0.01 of its total potential returns per unit of risk. HSBC Holdings plc is currently generating about 0.24 per unit of volatility. If you would invest 851.00 in HSBC Holdings plc on September 5, 2024 and sell it today you would earn a total of 51.00 from holding HSBC Holdings plc or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. HSBC Holdings plc
Performance |
| Timeline |
| SBM OFFSHORE |
| HSBC Holdings plc |
SBM OFFSHORE and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and HSBC Holdings
The main advantage of trading using opposite SBM OFFSHORE and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, HSBC Holdings 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 Holdings will offset losses from the drop in HSBC Holdings' long position.| SBM OFFSHORE vs. TOTAL GABON | SBM OFFSHORE vs. Walgreens Boots Alliance | SBM OFFSHORE vs. Peak Resources Limited |
| HSBC Holdings vs. Tencent Music Entertainment | HSBC Holdings vs. PARKEN Sport Entertainment | HSBC Holdings vs. SPORTING | HSBC Holdings vs. Townsquare Media |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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