Correlation Between HSBC MSCI and VanEck Sustainable
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and VanEck Sustainable 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 HSBC MSCI and VanEck Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC MSCI Japan and VanEck Sustainable European, you can compare the effects of market volatilities on HSBC MSCI and VanEck Sustainable 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 HSBC MSCI with a short position of VanEck Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and VanEck Sustainable.
Diversification Opportunities for HSBC MSCI and VanEck Sustainable
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HSBC and VanEck is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Japan and VanEck Sustainable European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Sustainable and HSBC 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 HSBC MSCI Japan are associated (or correlated) with VanEck Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Sustainable has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and VanEck Sustainable go up and down completely randomly.
Pair Corralation between HSBC MSCI and VanEck Sustainable
Assuming the 90 days trading horizon HSBC MSCI Japan is expected to generate 1.66 times more return on investment than VanEck Sustainable. However, HSBC MSCI is 1.66 times more volatile than VanEck Sustainable European. It trades about 0.07 of its potential returns per unit of risk. VanEck Sustainable European is currently generating about 0.09 per unit of risk. If you would invest 3,320 in HSBC MSCI Japan on September 5, 2024 and sell it today you would earn a total of 618.00 from holding HSBC MSCI Japan or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC MSCI Japan vs. VanEck Sustainable European
Performance |
| Timeline |
| HSBC MSCI Japan |
| VanEck Sustainable |
HSBC MSCI and VanEck Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and VanEck Sustainable
The main advantage of trading using opposite HSBC MSCI and VanEck Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, VanEck Sustainable 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 VanEck Sustainable will offset losses from the drop in VanEck Sustainable's long position.| HSBC MSCI vs. Amundi Index Solutions | HSBC MSCI vs. Manitou BF SA | HSBC MSCI vs. 21Shares Polkadot ETP | HSBC MSCI vs. Ekinops SA |
| VanEck Sustainable vs. HSBC MSCI Japan | VanEck Sustainable vs. iShares II Public | VanEck Sustainable vs. Hydratec Industries NV | VanEck Sustainable vs. VanEck Polkadot ETN |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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