Correlation Between Cresud SACIF and HSBC MSCI

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

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

Diversification Opportunities for Cresud SACIF and HSBC MSCI

0.9

Correlation Coefficient

Cresud SACIF  HSBC MSCI

Almost no diversification

The 3 months correlation between Cresud and HSBC is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and HSBC MSCI WORLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI WORLD and Cresud SACIF 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 Cresud SACIF y 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 WORLD has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and HSBC MSCI go up and down completely randomly.

Pair Corralation between Cresud SACIF and HSBC MSCI

Assuming the 90 days horizon Cresud SACIF y is expected to generate 4.18 times more return on investment than HSBC MSCI. However, Cresud SACIF is 4.18 times more volatile than HSBC MSCI WORLD. It trades about 0.07 of its potential returns per unit of risk. HSBC MSCI WORLD is currently generating about 0.12 per unit of risk. If you would invest  675.00  in Cresud SACIF y on October 22, 2024 and sell it today you would earn a total of  534.00  from holding Cresud SACIF y or generate 79.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.99%
Values	Daily Returns

Cresud SACIF y  vs.  HSBC MSCI WORLD

Cresud SACIF y

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

HSBC MSCI WORLD

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MSCI WORLD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, HSBC MSCI is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cresud SACIF and HSBC MSCI

The main advantage of trading using opposite Cresud SACIF and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF 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.

The idea behind Cresud SACIF y and HSBC MSCI WORLD 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.