Correlation Between HSBC FTSE and HSBC MSCI

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

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

Diversification Opportunities for HSBC FTSE and HSBC MSCI

0.0

Correlation Coefficient

HSBC FTSE  HSBC MSCI

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 FTSE EPRA and HSBC MSCI Turkey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI Turkey and HSBC FTSE 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 FTSE EPRA 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 Turkey has no effect on the direction of HSBC FTSE i.e., HSBC FTSE and HSBC MSCI go up and down completely randomly.

Pair Corralation between HSBC FTSE and HSBC MSCI

If you would invest (100.00) in HSBC MSCI Turkey on December 2, 2024 and sell it today you would earn a total of  100.00  from holding HSBC MSCI Turkey or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HSBC FTSE EPRA  vs.  HSBC MSCI Turkey

HSBC FTSE EPRA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HSBC FTSE EPRA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, HSBC FTSE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

HSBC MSCI Turkey

Risk-Adjusted Performance

Very Weak

Over the last 90 days HSBC MSCI Turkey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, HSBC MSCI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HSBC FTSE and HSBC MSCI

The main advantage of trading using opposite HSBC FTSE and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC FTSE 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 HSBC FTSE EPRA and HSBC MSCI Turkey 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.