Correlation Between HSBC MSCI and HSBC ETFs

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

By analyzing existing cross correlation between HSBC MSCI World and HSBC ETFs Public, you can compare the effects of market volatilities on HSBC MSCI and HSBC ETFs 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 ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC MSCI and HSBC ETFs.

Diversification Opportunities for HSBC MSCI and HSBC ETFs

0.0

Correlation Coefficient

HSBC MSCI  HSBC ETFs

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 World and HSBC ETFs Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC ETFs Public 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 World are associated (or correlated) with HSBC ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC ETFs Public has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and HSBC ETFs go up and down completely randomly.

Pair Corralation between HSBC MSCI and HSBC ETFs

If you would invest  4,671  in HSBC ETFs Public on October 6, 2024 and sell it today you would earn a total of  0.00  from holding HSBC ETFs Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

HSBC MSCI World  vs.  HSBC ETFs Public

HSBC MSCI World

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MSCI World are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking indicators, HSBC MSCI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HSBC ETFs Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HSBC ETFs Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HSBC ETFs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HSBC MSCI and HSBC ETFs

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

The idea behind HSBC MSCI World and HSBC ETFs Public 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.