Correlation Between EGRNF and Sun Hung
Can any of the company-specific risk be diversified away by investing in both EGRNF 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 EGRNF and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGRNF and Sun Hung Kai, you can compare the effects of market volatilities on EGRNF 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 EGRNF with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGRNF and Sun Hung.
Diversification Opportunities for EGRNF and Sun Hung
Very good diversification
The 3 months correlation between EGRNF and Sun is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding EGRNF 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 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 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 EGRNF i.e., EGRNF and Sun Hung go up and down completely randomly.
Pair Corralation between EGRNF and Sun Hung
Assuming the 90 days horizon EGRNF is expected to generate 95.67 times more return on investment than Sun Hung. However, EGRNF is 95.67 times more volatile than Sun Hung Kai. It trades about 0.15 of its potential returns per unit of risk. Sun Hung Kai is currently generating about -0.01 per unit of risk. If you would invest 11.00 in EGRNF on August 28, 2024 and sell it today you would lose (10.97) from holding EGRNF or give up 99.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGRNF vs. Sun Hung Kai
Performance |
| Timeline |
| EGRNF |
| Sun Hung Kai |
EGRNF and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGRNF and Sun Hung
The main advantage of trading using opposite EGRNF and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGRNF 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.| EGRNF vs. Hong Kong Land | EGRNF vs. Wharf Holdings | EGRNF vs. Holiday Island Holdings | EGRNF vs. Sun Hung Kai |
| Sun Hung vs. Hong Kong Land | Sun Hung vs. Wharf Holdings | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Bayport International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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