Correlation Between EGRNF and Longfor Group
Can any of the company-specific risk be diversified away by investing in both EGRNF and Longfor Group 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 EGRNF and Longfor Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGRNF and Longfor Group Holdings, you can compare the effects of market volatilities on EGRNF and Longfor Group 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 EGRNF with a short position of Longfor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGRNF and Longfor Group.
Diversification Opportunities for EGRNF and Longfor Group
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EGRNF and Longfor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding EGRNF and Longfor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Group Holdings and EGRNF 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 EGRNF are associated (or correlated) with Longfor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Group Holdings has no effect on the direction of EGRNF i.e., EGRNF and Longfor Group go up and down completely randomly.
Pair Corralation between EGRNF and Longfor Group
Assuming the 90 days horizon EGRNF is expected to generate 25.44 times more return on investment than Longfor Group. However, EGRNF is 25.44 times more volatile than Longfor Group Holdings. It trades about 0.15 of its potential returns per unit of risk. Longfor Group Holdings is currently generating about 0.15 per unit of risk. If you would invest 0.02 in EGRNF on September 3, 2024 and sell it today you would earn a total of 0.01 from holding EGRNF or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGRNF vs. Longfor Group Holdings
Performance |
| Timeline |
| EGRNF |
| Longfor Group Holdings |
EGRNF and Longfor Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGRNF and Longfor Group
The main advantage of trading using opposite EGRNF and Longfor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGRNF position performs unexpectedly, Longfor Group 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 Longfor Group will offset losses from the drop in Longfor Group's long position.| EGRNF vs. Hong Kong Land | EGRNF vs. Wharf Holdings | EGRNF vs. Holiday Island Holdings | EGRNF vs. Sun Hung Kai |
| Longfor Group vs. China Overseas Land | Longfor Group vs. Sun Hung Kai | Longfor Group vs. Country Garden Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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