Correlation Between Ke Holdings and Hysan Development
Can any of the company-specific risk be diversified away by investing in both Ke Holdings 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 Ke Holdings and Hysan Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Hysan Development Co, you can compare the effects of market volatilities on Ke Holdings 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 Ke Holdings with a short position of Hysan Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Hysan Development.
Diversification Opportunities for Ke Holdings and Hysan Development
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEKE and Hysan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Hysan Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hysan Development and Ke Holdings 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 Ke Holdings 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 Ke Holdings i.e., Ke Holdings and Hysan Development go up and down completely randomly.
Pair Corralation between Ke Holdings and Hysan Development
Given the investment horizon of 90 days Ke Holdings is expected to generate 1.47 times more return on investment than Hysan Development. However, Ke Holdings is 1.47 times more volatile than Hysan Development Co. It trades about 0.11 of its potential returns per unit of risk. Hysan Development Co is currently generating about 0.02 per unit of risk. If you would invest 1,389 in Ke Holdings on August 28, 2024 and sell it today you would earn a total of 451.00 from holding Ke Holdings or generate 32.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. Hysan Development Co
Performance |
| Timeline |
| Ke Holdings |
| Hysan Development |
Ke Holdings and Hysan Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Hysan Development
The main advantage of trading using opposite Ke Holdings and Hysan Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings 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.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
| Hysan Development vs. IRSA Inversiones Y | Hysan Development vs. Anywhere Real Estate | Hysan Development vs. Newmark Group | Hysan Development vs. New York City |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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