Correlation Between HSBC Holdings and Silver Bullet
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Silver Bullet 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 Holdings and Silver Bullet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings PLC and Silver Bullet Data, you can compare the effects of market volatilities on HSBC Holdings and Silver Bullet 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 Holdings with a short position of Silver Bullet. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Silver Bullet.
Diversification Opportunities for HSBC Holdings and Silver Bullet
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HSBC and Silver is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Silver Bullet Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bullet Data and HSBC Holdings 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 Holdings PLC are associated (or correlated) with Silver Bullet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bullet Data has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Silver Bullet go up and down completely randomly.
Pair Corralation between HSBC Holdings and Silver Bullet
Assuming the 90 days trading horizon HSBC Holdings is expected to generate 3.02 times less return on investment than Silver Bullet. But when comparing it to its historical volatility, HSBC Holdings PLC is 5.32 times less risky than Silver Bullet. It trades about 0.37 of its potential returns per unit of risk. Silver Bullet Data is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,450 in Silver Bullet Data on September 25, 2024 and sell it today you would earn a total of 800.00 from holding Silver Bullet Data or generate 14.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
HSBC Holdings PLC vs. Silver Bullet Data
Performance |
Timeline |
HSBC Holdings PLC |
Silver Bullet Data |
HSBC Holdings and Silver Bullet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HSBC Holdings and Silver Bullet
The main advantage of trading using opposite HSBC Holdings and Silver Bullet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Silver Bullet 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 Silver Bullet will offset losses from the drop in Silver Bullet's long position.HSBC Holdings vs. Samsung Electronics Co | HSBC Holdings vs. Samsung Electronics Co | HSBC Holdings vs. Hyundai Motor | HSBC Holdings vs. Toyota Motor Corp |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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