Correlation Between China Overseas and Sun Hung
Can any of the company-specific risk be diversified away by investing in both China Overseas 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 China Overseas and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Overseas Land and Sun Hung Kai, you can compare the effects of market volatilities on China Overseas 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 China Overseas with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Sun Hung.
Diversification Opportunities for China Overseas and Sun Hung
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Sun is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land 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 China Overseas 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 China Overseas Land 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 China Overseas i.e., China Overseas and Sun Hung go up and down completely randomly.
Pair Corralation between China Overseas and Sun Hung
Assuming the 90 days horizon China Overseas Land is expected to under-perform the Sun Hung. In addition to that, China Overseas is 1.34 times more volatile than Sun Hung Kai. It trades about -0.01 of its total potential returns per unit of risk. Sun Hung Kai is currently generating about 0.0 per unit of volatility. If you would invest 1,022 in Sun Hung Kai on August 28, 2024 and sell it today you would lose (73.00) from holding Sun Hung Kai or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.5% |
| Values | Daily Returns |
China Overseas Land vs. Sun Hung Kai
Performance |
| Timeline |
| China Overseas Land |
| Sun Hung Kai |
China Overseas and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Overseas and Sun Hung
The main advantage of trading using opposite China Overseas and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Overseas 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.| China Overseas vs. Sun Hung Kai | China Overseas vs. China Overseas Land | China Overseas vs. EGRNF | China Overseas vs. Sino Land Co |
| Sun Hung vs. Sino Land Co | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Daiwa House Industry | Sun Hung vs. China Overseas Land |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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