Correlation Between HSBC MSCI and HSBC USA

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

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

Diversification Opportunities for HSBC MSCI and HSBC USA

0.0

Correlation Coefficient

HSBC MSCI  HSBC USA

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

Pair Corralation between HSBC MSCI and HSBC USA

If you would invest (100.00) in HSBC MSCI USA on December 10, 2024 and sell it today you would earn a total of  100.00  from holding HSBC MSCI USA 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 MSCI USA  vs.  HSBC USA Sustainable

HSBC MSCI USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HSBC MSCI USA has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

HSBC USA Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days HSBC USA Sustainable has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with HSBC MSCI and HSBC USA

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

The idea behind HSBC MSCI USA and HSBC USA Sustainable 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 Stocks Directory module to find actively traded stocks across global markets.