Correlation Between HSBC Holdings and Grupo Gigante
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By analyzing existing cross correlation between HSBC Holdings plc and Grupo Gigante S, you can compare the effects of market volatilities on HSBC Holdings and Grupo Gigante 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 Grupo Gigante. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Grupo Gigante.
Diversification Opportunities for HSBC Holdings and Grupo Gigante
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and Grupo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Grupo Gigante S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Gigante S 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 Grupo Gigante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Gigante S has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Grupo Gigante go up and down completely randomly.
Pair Corralation between HSBC Holdings and Grupo Gigante
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 359.34 times more return on investment than Grupo Gigante. However, HSBC Holdings is 359.34 times more volatile than Grupo Gigante S. It trades about 0.22 of its potential returns per unit of risk. Grupo Gigante S is currently generating about -0.22 per unit of risk. If you would invest 64,300 in HSBC Holdings plc on February 1, 2024 and sell it today you would earn a total of 7,200 from holding HSBC Holdings plc or generate 11.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
HSBC Holdings plc vs. Grupo Gigante S
Performance |
Timeline |
HSBC Holdings plc |
Grupo Gigante S |
HSBC Holdings and Grupo Gigante Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HSBC Holdings and Grupo Gigante
The main advantage of trading using opposite HSBC Holdings and Grupo Gigante positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Grupo Gigante 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 Grupo Gigante will offset losses from the drop in Grupo Gigante's long position.HSBC Holdings vs. Monster Beverage | HSBC Holdings vs. New Oriental Education | HSBC Holdings vs. Costco Wholesale | HSBC Holdings vs. Deutsche Bank Aktiengesellschaft |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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