Correlation Between HSBC MSCI and HSBC MUCPAB

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

Diversification Opportunities for HSBC MSCI and HSBC MUCPAB

0.0

Correlation Coefficient

HSBC MSCI  HSBC MUCPAB

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

Pair Corralation between HSBC MSCI and HSBC MUCPAB

If you would invest  3,566  in HSBC MUCPAB ETF on September 4, 2024 and sell it today you would earn a total of  537.00  from holding HSBC MUCPAB ETF or generate 15.06% 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 MUCPAB ETF

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.

HSBC MUCPAB ETF

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MUCPAB ETF are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HSBC MUCPAB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HSBC MSCI and HSBC MUCPAB

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

The idea behind HSBC MSCI USA and HSBC MUCPAB ETF 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.