Correlation Between Swiss Leader and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Swiss Leader 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 Swiss Leader and HSBC MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Leader Price and HSBC MSCI USA, you can compare the effects of market volatilities on Swiss Leader 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 Swiss Leader with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Leader and HSBC MSCI.
Diversification Opportunities for Swiss Leader and HSBC MSCI
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swiss and HSBC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Leader Price and HSBC MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI USA and Swiss Leader 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 Swiss Leader Price 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 USA has no effect on the direction of Swiss Leader i.e., Swiss Leader and HSBC MSCI go up and down completely randomly.
Pair Corralation between Swiss Leader and HSBC MSCI
Assuming the 90 days trading horizon Swiss Leader is expected to generate 16.06 times less return on investment than HSBC MSCI. But when comparing it to its historical volatility, Swiss Leader Price is 1.24 times less risky than HSBC MSCI. It trades about 0.02 of its potential returns per unit of risk. HSBC MSCI USA is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,023 in HSBC MSCI USA on September 4, 2024 and sell it today you would earn a total of 183.00 from holding HSBC MSCI USA or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Leader Price vs. HSBC MSCI USA
Performance |
| Timeline |
Swiss Leader and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Swiss Leader Price
Pair trading matchups for Swiss Leader
HSBC MSCI USA
Pair trading matchups for HSBC MSCI
Pair Trading with Swiss Leader and HSBC MSCI
The main advantage of trading using opposite Swiss Leader and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Leader 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.| Swiss Leader vs. St Galler Kantonalbank | Swiss Leader vs. Glarner Kantonalbank | Swiss Leader vs. Schweiter Technologies AG | Swiss Leader vs. Metall Zug AG |
| HSBC MSCI vs. UBSFund Solutions MSCI | HSBC MSCI vs. Vanguard SP 500 | HSBC MSCI vs. iShares VII PLC | HSBC MSCI vs. iShares Core SP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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