Correlation Between Deutsche Wohnen and Sino Land
Can any of the company-specific risk be diversified away by investing in both Deutsche Wohnen and Sino 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 Deutsche Wohnen and Sino Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Wohnen SE and Sino Land, you can compare the effects of market volatilities on Deutsche Wohnen and Sino 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 Deutsche Wohnen with a short position of Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Wohnen and Sino Land.
Diversification Opportunities for Deutsche Wohnen and Sino Land
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Sino is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Wohnen SE and Sino Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land and Deutsche Wohnen 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 Deutsche Wohnen SE are associated (or correlated) with Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Deutsche Wohnen i.e., Deutsche Wohnen and Sino Land go up and down completely randomly.
Pair Corralation between Deutsche Wohnen and Sino Land
Assuming the 90 days trading horizon Deutsche Wohnen SE is expected to under-perform the Sino Land. In addition to that, Deutsche Wohnen is 1.25 times more volatile than Sino Land. It trades about -0.04 of its total potential returns per unit of risk. Sino Land is currently generating about 0.01 per unit of volatility. If you would invest 92.00 in Sino Land on September 27, 2024 and sell it today you would earn a total of 0.00 from holding Sino Land or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Wohnen SE vs. Sino Land
Performance |
| Timeline |
| Deutsche Wohnen SE |
| Sino Land |
Deutsche Wohnen and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Wohnen and Sino Land
The main advantage of trading using opposite Deutsche Wohnen and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Wohnen position performs unexpectedly, Sino 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 Sino Land will offset losses from the drop in Sino Land's long position.| Deutsche Wohnen vs. Sun Hung Kai | Deutsche Wohnen vs. Mitsubishi Estate Co | Deutsche Wohnen vs. Sino 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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