Correlation Between Kee Tai and Sino Horizon
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Sino Horizon 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 Kee Tai and Sino Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Sino Horizon Holdings, you can compare the effects of market volatilities on Kee Tai and Sino Horizon 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 Kee Tai with a short position of Sino Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Sino Horizon.
Diversification Opportunities for Kee Tai and Sino Horizon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kee and Sino is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Sino Horizon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Horizon Holdings and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Sino Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Horizon Holdings has no effect on the direction of Kee Tai i.e., Kee Tai and Sino Horizon go up and down completely randomly.
Pair Corralation between Kee Tai and Sino Horizon
Assuming the 90 days trading horizon Kee Tai Properties is expected to under-perform the Sino Horizon. But the stock apears to be less risky and, when comparing its historical volatility, Kee Tai Properties is 2.21 times less risky than Sino Horizon. The stock trades about -0.18 of its potential returns per unit of risk. The Sino Horizon Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,105 in Sino Horizon Holdings on October 25, 2024 and sell it today you would lose (665.00) from holding Sino Horizon Holdings or give up 21.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Sino Horizon Holdings
Performance |
| Timeline |
| Kee Tai Properties |
| Sino Horizon Holdings |
Kee Tai and Sino Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Sino Horizon
The main advantage of trading using opposite Kee Tai and Sino Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Sino Horizon 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 Sino Horizon will offset losses from the drop in Sino Horizon's long position.| Kee Tai vs. Hung Sheng Construction | Kee Tai vs. Chainqui Construction Development | Kee Tai vs. BES Engineering Co | Kee Tai vs. Long Bon International |
| Sino Horizon vs. Kee Tai Properties | Sino Horizon vs. Hung Sheng Construction | Sino Horizon vs. BES Engineering Co | Sino Horizon vs. Chainqui Construction Development |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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