Correlation Between HSBC MSCI and VanEck Polkadot
Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and VanEck Polkadot 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 Polkadot 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 Polkadot ETN, you can compare the effects of market volatilities on HSBC MSCI and VanEck Polkadot 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 Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and VanEck Polkadot.
Diversification Opportunities for HSBC MSCI and VanEck Polkadot
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HSBC and VanEck is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Japan and VanEck Polkadot ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Polkadot ETN 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 Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Polkadot ETN has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and VanEck Polkadot go up and down completely randomly.
Pair Corralation between HSBC MSCI and VanEck Polkadot
Assuming the 90 days trading horizon HSBC MSCI is expected to generate 3.69 times less return on investment than VanEck Polkadot. But when comparing it to its historical volatility, HSBC MSCI Japan is 5.18 times less risky than VanEck Polkadot. It trades about 0.06 of its potential returns per unit of risk. VanEck Polkadot ETN is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 215.00 in VanEck Polkadot ETN on September 3, 2024 and sell it today you would earn a total of 55.00 from holding VanEck Polkadot ETN or generate 25.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
HSBC MSCI Japan vs. VanEck Polkadot ETN
Performance |
| Timeline |
| HSBC MSCI Japan |
| VanEck Polkadot ETN |
HSBC MSCI and VanEck Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC MSCI and VanEck Polkadot
The main advantage of trading using opposite HSBC MSCI and VanEck Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, VanEck Polkadot 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 Polkadot will offset losses from the drop in VanEck Polkadot's long position.| HSBC MSCI vs. HSBC MSCI China | HSBC MSCI vs. HSBC Emerging Market | HSBC MSCI vs. HSBC USA Sustainable | HSBC MSCI vs. HSBC MUCPAB ETF |
| VanEck Polkadot vs. Vanguard SP 500 | VanEck Polkadot vs. SPDR Dow Jones | VanEck Polkadot vs. iShares Core MSCI | VanEck Polkadot vs. iShares SP 500 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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