Correlation Between HSBC MSCI and Rize Global

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

Diversification Opportunities for HSBC MSCI and Rize Global

0.96

Correlation Coefficient

HSBC MSCI  Rize Global

Almost no diversification

The 3 months correlation between HSBC and Rize is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding HSBC MSCI USA and Rize Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rize Global Sustainable 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 Rize Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rize Global Sustainable has no effect on the direction of HSBC MSCI i.e., HSBC MSCI and Rize Global go up and down completely randomly.

Pair Corralation between HSBC MSCI and Rize Global

Assuming the 90 days trading horizon HSBC MSCI USA is expected to generate 1.47 times more return on investment than Rize Global. However, HSBC MSCI is 1.47 times more volatile than Rize Global Sustainable. It trades about 0.32 of its potential returns per unit of risk. Rize Global Sustainable is currently generating about 0.24 per unit of risk. If you would invest  3,713  in HSBC MSCI USA on April 24, 2025 and sell it today you would earn a total of  639.00  from holding HSBC MSCI USA or generate 17.21% return on investment over 90 days.

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

HSBC MSCI USA  vs.  Rize Global Sustainable

HSBC MSCI USA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MSCI USA are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, HSBC MSCI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rize Global Sustainable

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rize Global Sustainable are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Rize Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with HSBC MSCI and Rize Global

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

The idea behind HSBC MSCI USA and Rize Global Sustainable 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.