Correlation Between DATAWALK B and HSBC Holdings

Can any of the company-specific risk be diversified away by investing in both DATAWALK B 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 DATAWALK B and HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DATAWALK B H ZY and HSBC Holdings plc, you can compare the effects of market volatilities on DATAWALK B 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 DATAWALK B with a short position of HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAWALK B and HSBC Holdings.

Diversification Opportunities for DATAWALK B and HSBC Holdings

0.53

Correlation Coefficient

DATAWALK B  HSBC Holdings

Very weak diversification

The 3 months correlation between DATAWALK and HSBC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DATAWALK B H ZY 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 DATAWALK B 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 DATAWALK B H ZY 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 DATAWALK B i.e., DATAWALK B and HSBC Holdings go up and down completely randomly.

Pair Corralation between DATAWALK B and HSBC Holdings

Assuming the 90 days horizon DATAWALK B H ZY is expected to generate 4.06 times more return on investment than HSBC Holdings. However, DATAWALK B is 4.06 times more volatile than HSBC Holdings plc. It trades about 0.12 of its potential returns per unit of risk. HSBC Holdings plc is currently generating about 0.16 per unit of risk. If you would invest  1,906  in DATAWALK B H ZY on April 24, 2025 and sell it today you would earn a total of  654.00  from holding DATAWALK B H ZY or generate 34.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

DATAWALK B H ZY  vs.  HSBC Holdings plc

DATAWALK B H

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DATAWALK B H ZY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DATAWALK B reported solid returns over the last few months and may actually be approaching a breakup point.

HSBC Holdings plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC Holdings plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, HSBC Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with DATAWALK B and HSBC Holdings

The main advantage of trading using opposite DATAWALK B and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATAWALK B 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.

The idea behind DATAWALK B H ZY and HSBC Holdings plc 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 Transaction History module to view history of all your transactions and understand their impact on performance.