Correlation Between Lyxor MSCI and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Lyxor MSCI 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 Lyxor MSCI and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor MSCI Brazil and HSBC MSCI Taiwan, you can compare the effects of market volatilities on Lyxor MSCI 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 Lyxor MSCI with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor MSCI and HSBC MSCI.
Diversification Opportunities for Lyxor MSCI and HSBC MSCI
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and HSBC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor MSCI Brazil and HSBC MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI Taiwan and Lyxor MSCI 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 MSCI Brazil 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 Taiwan has no effect on the direction of Lyxor MSCI i.e., Lyxor MSCI and HSBC MSCI go up and down completely randomly.
Pair Corralation between Lyxor MSCI and HSBC MSCI
Assuming the 90 days trading horizon Lyxor MSCI Brazil is expected to under-perform the HSBC MSCI. In addition to that, Lyxor MSCI is 1.48 times more volatile than HSBC MSCI Taiwan. It trades about -0.27 of its total potential returns per unit of risk. HSBC MSCI Taiwan is currently generating about -0.13 per unit of volatility. If you would invest 7,948 in HSBC MSCI Taiwan on September 1, 2024 and sell it today you would lose (281.00) from holding HSBC MSCI Taiwan or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor MSCI Brazil vs. HSBC MSCI Taiwan
Performance |
| Timeline |
| Lyxor MSCI Brazil |
| HSBC MSCI Taiwan |
Lyxor MSCI and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor MSCI and HSBC MSCI
The main advantage of trading using opposite Lyxor MSCI and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor MSCI 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.| Lyxor MSCI vs. Procimmo Real Estate | Lyxor MSCI vs. SPDR Dow Jones | Lyxor MSCI vs. Baloise Holding AG | Lyxor MSCI vs. Autoneum Holding AG |
| HSBC MSCI vs. HSBC USA SUSTAINABLE | HSBC MSCI vs. HSBC MSCI Europe | HSBC MSCI vs. HSBC EMERGING MARKET | HSBC MSCI vs. HSBC MSCI Japan |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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