Correlation Between Oxford Technology and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both Oxford Technology and HSBC Holdings 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 Oxford Technology and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Technology 2 and HSBC Holdings PLC, you can compare the effects of market volatilities on Oxford Technology and HSBC Holdings 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 Oxford Technology with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Technology and HSBC Holdings.
Diversification Opportunities for Oxford Technology and HSBC Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oxford and HSBC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Technology 2 and HSBC Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings PLC and Oxford Technology 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 Oxford Technology 2 are associated (or correlated) with HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings PLC has no effect on the direction of Oxford Technology i.e., Oxford Technology and HSBC Holdings go up and down completely randomly.
Pair Corralation between Oxford Technology and HSBC Holdings
Assuming the 90 days trading horizon Oxford Technology 2 is expected to under-perform the HSBC Holdings. In addition to that, Oxford Technology is 1.95 times more volatile than HSBC Holdings PLC. It trades about -0.12 of its total potential returns per unit of risk. HSBC Holdings PLC is currently generating about 0.09 per unit of volatility. If you would invest 57,515 in HSBC Holdings PLC on September 24, 2024 and sell it today you would earn a total of 18,565 from holding HSBC Holdings PLC or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Oxford Technology 2 vs. HSBC Holdings PLC
Performance |
| Timeline |
| Oxford Technology |
| HSBC Holdings PLC |
Oxford Technology and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Technology and HSBC Holdings
The main advantage of trading using opposite Oxford Technology and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Technology position performs unexpectedly, HSBC Holdings 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 Holdings will offset losses from the drop in HSBC Holdings' long position.| Oxford Technology vs. Ecclesiastical Insurance Office | Oxford Technology vs. Atalaya Mining | Oxford Technology vs. Beowulf Mining | Oxford Technology vs. Invesco Physical Silver |
| HSBC Holdings vs. Oxford Technology 2 | HSBC Holdings vs. The Mercantile Investment | HSBC Holdings vs. Odyssean Investment Trust | HSBC Holdings vs. Albion Technology General |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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