Correlation Between HSBC Holdings and LOG Commercial

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

By analyzing existing cross correlation between HSBC Holdings plc and LOG Commercial Properties, you can compare the effects of market volatilities on HSBC Holdings and LOG Commercial 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 LOG Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and LOG Commercial.

Diversification Opportunities for HSBC Holdings and LOG Commercial

0.54

Correlation Coefficient

HSBC Holdings  LOG Commercial

Very weak diversification

The 3 months correlation between HSBC and LOG is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and LOG Commercial Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOG Commercial Properties 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 LOG Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOG Commercial Properties has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and LOG Commercial go up and down completely randomly.

Pair Corralation between HSBC Holdings and LOG Commercial

Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.84 times more return on investment than LOG Commercial. However, HSBC Holdings plc is 1.19 times less risky than LOG Commercial. It trades about 0.16 of its potential returns per unit of risk. LOG Commercial Properties is currently generating about 0.04 per unit of risk. If you would invest  7,633  in HSBC Holdings plc on April 22, 2025 and sell it today you would earn a total of  1,124  from holding HSBC Holdings plc or generate 14.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

HSBC Holdings plc  vs.  LOG Commercial Properties

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 somewhat weak basic indicators, HSBC Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

LOG Commercial Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LOG Commercial Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, LOG Commercial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HSBC Holdings and LOG Commercial

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

The idea behind HSBC Holdings plc and LOG Commercial Properties 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..