Correlation Between Aroundtown and Hysan Development
Can any of the company-specific risk be diversified away by investing in both Aroundtown and Hysan Development 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 Aroundtown and Hysan Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aroundtown SA and Hysan Development Co, you can compare the effects of market volatilities on Aroundtown and Hysan Development 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 Aroundtown with a short position of Hysan Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aroundtown and Hysan Development.
Diversification Opportunities for Aroundtown and Hysan Development
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aroundtown and Hysan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aroundtown SA and Hysan Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hysan Development and Aroundtown 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 Aroundtown SA are associated (or correlated) with Hysan Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hysan Development has no effect on the direction of Aroundtown i.e., Aroundtown and Hysan Development go up and down completely randomly.
Pair Corralation between Aroundtown and Hysan Development
Assuming the 90 days horizon Aroundtown SA is expected to under-perform the Hysan Development. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aroundtown SA is 1.25 times less risky than Hysan Development. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Hysan Development Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Hysan Development Co on August 24, 2024 and sell it today you would lose (23.00) from holding Hysan Development Co or give up 6.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aroundtown SA vs. Hysan Development Co
Performance |
| Timeline |
| Aroundtown SA |
| Hysan Development |
Aroundtown and Hysan Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aroundtown and Hysan Development
The main advantage of trading using opposite Aroundtown and Hysan Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aroundtown position performs unexpectedly, Hysan Development 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 Hysan Development will offset losses from the drop in Hysan Development's long position.| Aroundtown vs. Asia Pptys | Aroundtown vs. Adler Group SA | Aroundtown vs. Aztec Land Comb | Aroundtown vs. Ambase Corp |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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