Correlation Between HSBC MSCI and HSBC Multi

Can any of the company-specific risk be diversified away by investing in both HSBC MSCI and HSBC Multi 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 HSBC MSCI and HSBC Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HSBC MSCI Japan and HSBC Multi Factor, you can compare the effects of market volatilities on HSBC MSCI and HSBC Multi 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 HSBC MSCI with a short position of HSBC Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and HSBC Multi.

Diversification Opportunities for HSBC MSCI and HSBC Multi

0.0

Correlation Coefficient

HSBC MSCI  HSBC Multi

Pay attention - limited upside

The 3 months correlation between HSBC and HSBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI Japan and HSBC Multi Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Multi Factor and HSBC MSCI 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 MSCI Japan are associated (or correlated) with HSBC Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Multi Factor has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and HSBC Multi go up and down completely randomly.

Pair Corralation between HSBC MSCI and HSBC Multi

If you would invest  3,676  in HSBC MSCI Japan on September 5, 2024 and sell it today you would earn a total of  248.00  from holding HSBC MSCI Japan or generate 6.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	81.54%
Values	Daily Returns

HSBC MSCI Japan  vs.  HSBC Multi Factor

HSBC MSCI Japan

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MSCI Japan are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HSBC MSCI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HSBC Multi Factor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HSBC Multi Factor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HSBC Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HSBC MSCI and HSBC Multi

The main advantage of trading using opposite HSBC MSCI and HSBC Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC MSCI position performs unexpectedly, HSBC Multi 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 Multi will offset losses from the drop in HSBC Multi's long position.

The idea behind HSBC MSCI Japan and HSBC Multi Factor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.