Correlation Between Lyxor UCITS and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS 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 UCITS 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 UCITS Stoxx and HSBC MSCI World, you can compare the effects of market volatilities on Lyxor UCITS 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 UCITS with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and HSBC MSCI.
Diversification Opportunities for Lyxor UCITS and HSBC MSCI
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and HSBC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and HSBC MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI World 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 Stoxx 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 World has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and HSBC MSCI go up and down completely randomly.
Pair Corralation between Lyxor UCITS and HSBC MSCI
Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 1.3 times less return on investment than HSBC MSCI. In addition to that, Lyxor UCITS is 1.24 times more volatile than HSBC MSCI World. It trades about 0.08 of its total potential returns per unit of risk. HSBC MSCI World is currently generating about 0.13 per unit of volatility. If you would invest 2,355 in HSBC MSCI World on September 20, 2024 and sell it today you would earn a total of 1,300 from holding HSBC MSCI World or generate 55.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. HSBC MSCI World
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| HSBC MSCI World |
Lyxor UCITS and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and HSBC MSCI
The main advantage of trading using opposite Lyxor UCITS and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS 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 UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Gold Bullion Securities | Lyxor UCITS vs. SSgA SPDR ETFs |
| HSBC MSCI vs. Lyxor UCITS Japan | HSBC MSCI vs. Lyxor UCITS Japan | HSBC MSCI vs. Lyxor UCITS Stoxx | HSBC MSCI vs. Gold Bullion Securities |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |