Correlation Between HSBC USA and HSBC MSCI

Can any of the company-specific risk be diversified away by investing in both HSBC USA 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 USA 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 USA Sustainable and HSBC MSCI USA, you can compare the effects of market volatilities on HSBC USA 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 USA with a short position of HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC USA and HSBC MSCI.

Diversification Opportunities for HSBC USA and HSBC MSCI

0.0

Correlation Coefficient

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

Pair Corralation between HSBC USA and HSBC MSCI

If you would invest  2,546  in HSBC USA Sustainable on September 3, 2024 and sell it today you would earn a total of  424.00  from holding HSBC USA Sustainable or generate 16.65% return on investment over 90 days.

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

HSBC USA Sustainable  vs.  HSBC MSCI USA

HSBC USA Sustainable

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC USA Sustainable are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HSBC USA sustained solid returns over the last few months and may actually be approaching a breakup point.

HSBC MSCI USA

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with HSBC USA and HSBC MSCI

The main advantage of trading using opposite HSBC USA and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC USA 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 USA Sustainable and HSBC MSCI USA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.