Correlation Between KAUFMAN ET and Sun Hung
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET and Sun Hung 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 KAUFMAN ET and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Sun Hung Kai, you can compare the effects of market volatilities on KAUFMAN ET and Sun Hung 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 KAUFMAN ET with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Sun Hung.
Diversification Opportunities for KAUFMAN ET and Sun Hung
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between KAUFMAN and Sun is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai and KAUFMAN ET 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 KAUFMAN ET BROAD are associated (or correlated) with Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Sun Hung go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Sun Hung
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the Sun Hung. But the stock apears to be less risky and, when comparing its historical volatility, KAUFMAN ET BROAD is 5.15 times less risky than Sun Hung. The stock trades about -0.27 of its potential returns per unit of risk. The Sun Hung Kai is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 717.00 in Sun Hung Kai on September 2, 2024 and sell it today you would earn a total of 213.00 from holding Sun Hung Kai or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Sun Hung Kai
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Sun Hung Kai |
KAUFMAN ET and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Sun Hung
The main advantage of trading using opposite KAUFMAN ET and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
| Sun Hung vs. PUBLIC STORAGE PRFO | Sun Hung vs. AXWAY SOFTWARE EO | Sun Hung vs. Datang International Power | Sun Hung vs. PSI Software AG |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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