Correlation Between Daiwa House and International Land
Can any of the company-specific risk be diversified away by investing in both Daiwa House and International Land 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 Daiwa House and International Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiwa House Industry and International Land Alliance, you can compare the effects of market volatilities on Daiwa House and International Land 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 Daiwa House with a short position of International Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiwa House and International Land.
Diversification Opportunities for Daiwa House and International Land
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daiwa and International is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Daiwa House Industry and International Land Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Land and Daiwa House 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 Daiwa House Industry are associated (or correlated) with International Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Land has no effect on the direction of Daiwa House i.e., Daiwa House and International Land go up and down completely randomly.
Pair Corralation between Daiwa House and International Land
Assuming the 90 days horizon Daiwa House is expected to generate 34.39 times less return on investment than International Land. But when comparing it to its historical volatility, Daiwa House Industry is 10.38 times less risky than International Land. It trades about 0.02 of its potential returns per unit of risk. International Land Alliance is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in International Land Alliance on October 21, 2024 and sell it today you would lose (2.00) from holding International Land Alliance or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiwa House Industry vs. International Land Alliance
Performance |
| Timeline |
| Daiwa House Industry |
| International Land |
Daiwa House and International Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiwa House and International Land
The main advantage of trading using opposite Daiwa House and International Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiwa House position performs unexpectedly, International Land 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 International Land will offset losses from the drop in International Land's long position.| Daiwa House vs. Sino Land Co | Daiwa House vs. Sun Hung Kai | Daiwa House vs. Holiday Island Holdings | Daiwa House vs. China Overseas Land |
| International Land vs. Hong Kong Land | International Land vs. Wharf Holdings | International Land vs. Holiday Island Holdings | International Land vs. Sun Hung Kai |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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