Correlation Between FIBRA Storage and HSBC Holdings
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By analyzing existing cross correlation between FIBRA Storage and HSBC Holdings plc, you can compare the effects of market volatilities on FIBRA Storage 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 FIBRA Storage with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBRA Storage and HSBC Holdings.
Diversification Opportunities for FIBRA Storage and HSBC Holdings
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FIBRA and HSBC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage i.e., FIBRA Storage and HSBC Holdings go up and down completely randomly.
Pair Corralation between FIBRA Storage and HSBC Holdings
Assuming the 90 days trading horizon FIBRA Storage is expected to generate 4.11 times less return on investment than HSBC Holdings. But when comparing it to its historical volatility, FIBRA Storage is 1.63 times less risky than HSBC Holdings. It trades about 0.04 of its potential returns per unit of risk. HSBC Holdings plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 62,175 in HSBC Holdings plc on September 4, 2024 and sell it today you would earn a total of 31,325 from holding HSBC Holdings plc or generate 50.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIBRA Storage vs. HSBC Holdings plc
Performance |
| Timeline |
| FIBRA Storage |
| HSBC Holdings plc |
FIBRA Storage and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIBRA Storage and HSBC Holdings
The main advantage of trading using opposite FIBRA Storage and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBRA Storage 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.| FIBRA Storage vs. Verizon Communications | FIBRA Storage vs. DXC Technology | FIBRA Storage vs. First Majestic Silver | FIBRA Storage vs. CVS Health |
| HSBC Holdings vs. United States Steel | HSBC Holdings vs. FIBRA Storage | HSBC Holdings vs. Micron Technology | HSBC Holdings vs. Delta Air Lines |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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