Correlation Between Credit Suisse and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and HSBC Holdings 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 Credit Suisse and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Group and HSBC Holdings PLC, you can compare the effects of market volatilities on Credit Suisse and HSBC Holdings 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 Credit Suisse with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and HSBC Holdings.
Diversification Opportunities for Credit Suisse and HSBC Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and HSBC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Group and HSBC Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings PLC and Credit Suisse 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 Credit Suisse Group are associated (or correlated) with HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings PLC has no effect on the direction of Credit Suisse i.e., Credit Suisse and HSBC Holdings go up and down completely randomly.
Pair Corralation between Credit Suisse and HSBC Holdings
If you would invest 3,906 in HSBC Holdings PLC on January 20, 2024 and sell it today you would earn a total of 146.00 from holding HSBC Holdings PLC or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Credit Suisse Group vs. HSBC Holdings PLC
Performance |
| Timeline |
| Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HSBC Holdings PLC |
Credit Suisse and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and HSBC Holdings
The main advantage of trading using opposite Credit Suisse and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, HSBC Holdings 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 Holdings will offset losses from the drop in HSBC Holdings' long position.| Credit Suisse vs. Barclays PLC ADR | Credit Suisse vs. HSBC Holdings PLC | Credit Suisse vs. ING Group NV | Credit Suisse vs. Citigroup |
| HSBC Holdings vs. ING Group NV | HSBC Holdings vs. Natwest Group PLC | HSBC Holdings vs. Banco Santander SA | HSBC Holdings vs. UBS Group AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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