Correlation Between DevEx Resources and SUN HUNG
Can any of the company-specific risk be diversified away by investing in both DevEx Resources 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 DevEx Resources and SUN HUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DevEx Resources Limited and SUN HUNG KAI, you can compare the effects of market volatilities on DevEx Resources 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 DevEx Resources with a short position of SUN HUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DevEx Resources and SUN HUNG.
Diversification Opportunities for DevEx Resources and SUN HUNG
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DevEx and SUN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited 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 DevEx Resources 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 DevEx Resources Limited 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 DevEx Resources i.e., DevEx Resources and SUN HUNG go up and down completely randomly.
Pair Corralation between DevEx Resources and SUN HUNG
Assuming the 90 days horizon DevEx Resources is expected to generate 3.97 times less return on investment than SUN HUNG. In addition to that, DevEx Resources is 1.27 times more volatile than SUN HUNG KAI. It trades about 0.03 of its total potential returns per unit of risk. SUN HUNG KAI is currently generating about 0.17 per unit of volatility. If you would invest 714.00 in SUN HUNG KAI on August 30, 2024 and sell it today you would earn a total of 196.00 from holding SUN HUNG KAI or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DevEx Resources Limited vs. SUN HUNG KAI
Performance |
| Timeline |
| DevEx Resources |
| SUN HUNG KAI |
DevEx Resources and SUN HUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DevEx Resources and SUN HUNG
The main advantage of trading using opposite DevEx Resources and SUN HUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources 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.| DevEx Resources vs. YOOMA WELLNESS INC | DevEx Resources vs. EEDUCATION ALBERT AB | DevEx Resources vs. Bausch Health Companies | DevEx Resources vs. G8 EDUCATION |
| SUN HUNG vs. OAKTRSPECLENDNEW | SUN HUNG vs. PT Bank Maybank | SUN HUNG vs. Mizuho Financial Group | SUN HUNG vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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