Correlation Between Lyxor UCITS and HSBC Emerging
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS 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 Lyxor UCITS and HSBC Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Japan and HSBC Emerging Market, you can compare the effects of market volatilities on Lyxor UCITS 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 Lyxor UCITS with a short position of HSBC Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and HSBC Emerging.
Diversification Opportunities for Lyxor UCITS and HSBC Emerging
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and HSBC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan 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 Lyxor UCITS 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 Lyxor UCITS Japan 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 Lyxor UCITS i.e., Lyxor UCITS and HSBC Emerging go up and down completely randomly.
Pair Corralation between Lyxor UCITS and HSBC Emerging
Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 1.27 times more return on investment than HSBC Emerging. However, Lyxor UCITS is 1.27 times more volatile than HSBC Emerging Market. It trades about 0.13 of its potential returns per unit of risk. HSBC Emerging Market is currently generating about 0.15 per unit of risk. If you would invest 18,266 in Lyxor UCITS Japan on November 3, 2024 and sell it today you would earn a total of 4,064 from holding Lyxor UCITS Japan or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. HSBC Emerging Market
Performance |
| Timeline |
| Lyxor UCITS Japan |
| HSBC Emerging Market |
Lyxor UCITS and HSBC Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and HSBC Emerging
The main advantage of trading using opposite Lyxor UCITS and HSBC Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS 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.| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions |
| HSBC Emerging vs. HSBC MSCI China | HSBC Emerging vs. HSBC EURO STOXX | HSBC Emerging vs. HSBC MSCI Emerging | HSBC Emerging vs. HSBC USA Sustainable |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |