Correlation Between JPM Global and HSBC SP

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

By analyzing existing cross correlation between JPM Global Research and HSBC SP 500, you can compare the effects of market volatilities on JPM Global and HSBC SP 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 JPM Global with a short position of HSBC SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Global and HSBC SP.

Diversification Opportunities for JPM Global and HSBC SP

0.99

Correlation Coefficient

JPM Global  HSBC SP

No risk reduction

The 3 months correlation between JPM and HSBC is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding JPM Global Research and HSBC SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC SP 500 and JPM Global 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 JPM Global Research are associated (or correlated) with HSBC SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC SP 500 has no effect on the direction of JPM Global i.e., JPM Global and HSBC SP go up and down completely randomly.

Pair Corralation between JPM Global and HSBC SP

Assuming the 90 days trading horizon JPM Global is expected to generate 1.1 times less return on investment than HSBC SP. But when comparing it to its historical volatility, JPM Global Research is 1.18 times less risky than HSBC SP. It trades about 0.17 of its potential returns per unit of risk. HSBC SP 500 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  469,027  in HSBC SP 500 on July 14, 2025 and sell it today you would earn a total of  32,833  from holding HSBC SP 500 or generate 7.0% return on investment over 90 days.

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

JPM Global Research  vs.  HSBC SP 500

JPM Global Research

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPM Global Research are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPM Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

HSBC SP 500

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC SP 500 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, HSBC SP may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with JPM Global and HSBC SP

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

The idea behind JPM Global Research and HSBC SP 500 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.