Correlation Between Hsbc Government and International Value

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

By analyzing existing cross correlation between Hsbc Government Money and International Value Fund, you can compare the effects of market volatilities on Hsbc Government and International Value 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 Government with a short position of International Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsbc Government and International Value.

Diversification Opportunities for Hsbc Government and International Value

0.0

Correlation Coefficient

Hsbc Government  International Value

Pay attention - limited upside

The 3 months correlation between Hsbc and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hsbc Government Money and International Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Value and Hsbc Government 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 Government Money are associated (or correlated) with International Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Value has no effect on the direction of Hsbc Government i.e., Hsbc Government and International Value go up and down completely randomly.

Pair Corralation between Hsbc Government and International Value

If you would invest  835.00  in International Value Fund on December 22, 2024 and sell it today you would earn a total of  132.00  from holding International Value Fund or generate 15.81% return on investment over 90 days.

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

Hsbc Government Money  vs.  International Value Fund

Hsbc Government Money

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hsbc Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hsbc Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

International Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Value Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, International Value showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hsbc Government and International Value

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

The idea behind Hsbc Government Money and International Value Fund 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.