Correlation Between 404280CL1 and Dow Jones
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By analyzing existing cross correlation between HSBC HOLDINGS PLC and Dow Jones Industrial, you can compare the effects of market volatilities on 404280CL1 and Dow Jones 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 404280CL1 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of 404280CL1 and Dow Jones.
Diversification Opportunities for 404280CL1 and Dow Jones
Good diversification
The 3 months correlation between 404280CL1 and Dow is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HSBC HOLDINGS PLC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and 404280CL1 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 HSBC HOLDINGS PLC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of 404280CL1 i.e., 404280CL1 and Dow Jones go up and down completely randomly.
Pair Corralation between 404280CL1 and Dow Jones
Assuming the 90 days trading horizon HSBC HOLDINGS PLC is expected to generate 54.2 times more return on investment than Dow Jones. However, 404280CL1 is 54.2 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.05 per unit of risk. If you would invest 8,675 in HSBC HOLDINGS PLC on January 26, 2025 and sell it today you would earn a total of 510.00 from holding HSBC HOLDINGS PLC or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.65% |
| Values | Daily Returns |
HSBC HOLDINGS PLC vs. Dow Jones Industrial
Performance |
| Timeline |
404280CL1 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HSBC HOLDINGS PLC
Pair trading matchups for 404280CL1
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with 404280CL1 and Dow Jones
The main advantage of trading using opposite 404280CL1 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 404280CL1 position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| 404280CL1 vs. Anheuser Busch Inbev | 404280CL1 vs. Willamette Valley Vineyards | 404280CL1 vs. Sphere Entertainment Co | 404280CL1 vs. Sea |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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