Correlation Between Multi Units and HSBC Emerging
Can any of the company-specific risk be diversified away by investing in both Multi Units and HSBC Emerging 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 Multi Units and HSBC Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units France and HSBC Emerging Market, you can compare the effects of market volatilities on Multi Units and HSBC Emerging 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 Multi Units with a short position of HSBC Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and HSBC Emerging.
Diversification Opportunities for Multi Units and HSBC Emerging
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Multi and HSBC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France and HSBC Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Emerging Market and Multi Units 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 Multi Units France are associated (or correlated) with HSBC Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Emerging Market has no effect on the direction of Multi Units i.e., Multi Units and HSBC Emerging go up and down completely randomly.
Pair Corralation between Multi Units and HSBC Emerging
Assuming the 90 days trading horizon Multi Units France is expected to under-perform the HSBC Emerging. But the etf apears to be less risky and, when comparing its historical volatility, Multi Units France is 1.3 times less risky than HSBC Emerging. The etf trades about -0.03 of its potential returns per unit of risk. The HSBC Emerging Market is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,333 in HSBC Emerging Market on September 2, 2024 and sell it today you would earn a total of 110.00 from holding HSBC Emerging Market or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units France vs. HSBC Emerging Market
Performance |
| Timeline |
| Multi Units France |
| HSBC Emerging Market |
Multi Units and HSBC Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and HSBC Emerging
The main advantage of trading using opposite Multi Units and HSBC Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units position performs unexpectedly, HSBC Emerging 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 Emerging will offset losses from the drop in HSBC Emerging's long position.| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor MSCI Brazil | Multi Units vs. MULTI UNITS LUXEMBOURG | Multi Units vs. Multi Units France |
| HSBC Emerging vs. Manitou BF SA | HSBC Emerging vs. Granite 3x LVMH | HSBC Emerging vs. 21Shares Polkadot ETP | HSBC Emerging vs. Ekinops SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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