Correlation Between Procter Gamble and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and HSBC MSCI China, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and HSBC MSCI.
Diversification Opportunities for Procter Gamble and HSBC MSCI
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Procter and HSBC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and HSBC MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI China and Procter Gamble 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 Procter Gamble 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 China has no effect on the direction of Procter Gamble i.e., Procter Gamble and HSBC MSCI go up and down completely randomly.
Pair Corralation between Procter Gamble and HSBC MSCI
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.65 times more return on investment than HSBC MSCI. However, Procter Gamble is 1.55 times less risky than HSBC MSCI. It trades about 0.08 of its potential returns per unit of risk. HSBC MSCI China is currently generating about -0.05 per unit of risk. If you would invest 16,958 in Procter Gamble on August 24, 2024 and sell it today you would earn a total of 317.00 from holding Procter Gamble or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. HSBC MSCI China
Performance |
| Timeline |
| Procter Gamble |
| HSBC MSCI China |
Procter Gamble and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and HSBC MSCI
The main advantage of trading using opposite Procter Gamble and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Eshallgo Class A | Procter Gamble vs. Amtech Systems | Procter Gamble vs. Gold Fields Ltd | Procter Gamble vs. Aegean Airlines SA |
| HSBC MSCI vs. HSBC Multi Factor | HSBC MSCI vs. HSBC Emerging Market | HSBC MSCI vs. HSBC USA Sustainable | 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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