Correlation Between Adler Group and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Adler Group and Hang Lung 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 Adler Group and Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adler Group SA and Hang Lung Properties, you can compare the effects of market volatilities on Adler Group and Hang Lung 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 Adler Group with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and Hang Lung.
Diversification Opportunities for Adler Group and Hang Lung
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Adler and Hang is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Adler Group SA and Hang Lung Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Properties and Adler Group 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 Adler Group SA are associated (or correlated) with Hang Lung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Lung Properties has no effect on the direction of Adler Group i.e., Adler Group and Hang Lung go up and down completely randomly.
Pair Corralation between Adler Group and Hang Lung
Assuming the 90 days horizon Adler Group SA is expected to under-perform the Hang Lung. In addition to that, Adler Group is 1.58 times more volatile than Hang Lung Properties. It trades about -0.05 of its total potential returns per unit of risk. Hang Lung Properties is currently generating about -0.04 per unit of volatility. If you would invest 784.00 in Hang Lung Properties on August 25, 2024 and sell it today you would lose (393.00) from holding Hang Lung Properties or give up 50.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adler Group SA vs. Hang Lung Properties
Performance |
| Timeline |
| Adler Group SA |
| Hang Lung Properties |
Adler Group and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adler Group and Hang Lung
The main advantage of trading using opposite Adler Group and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adler Group position performs unexpectedly, Hang Lung 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 Hang Lung will offset losses from the drop in Hang Lung's long position.| Adler Group vs. Aztec Land Comb | Adler Group vs. Bridgemarq Real Estate | Adler Group vs. Ambase Corp | Adler Group vs. Agritek Holdings |
| Hang Lung vs. Ascendas India Trust | Hang Lung vs. Asia Pptys | Hang Lung vs. Adler Group SA | Hang Lung vs. Aztec Land Comb |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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