Correlation Between Five Point and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Five Point 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 Five Point and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Point Holdings and Sun Hung Kai, you can compare the effects of market volatilities on Five Point 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 Five Point with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Point and Sun Hung.
Diversification Opportunities for Five Point and Sun Hung
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Five and Sun is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Five Point Holdings 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 Five Point 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 Five Point Holdings 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 Five Point i.e., Five Point and Sun Hung go up and down completely randomly.
Pair Corralation between Five Point and Sun Hung
Considering the 90-day investment horizon Five Point is expected to generate 1.64 times less return on investment than Sun Hung. In addition to that, Five Point is 1.25 times more volatile than Sun Hung Kai. It trades about 0.06 of its total potential returns per unit of risk. Sun Hung Kai is currently generating about 0.13 per unit of volatility. If you would invest 978.00 in Sun Hung Kai on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Sun Hung Kai or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Five Point Holdings vs. Sun Hung Kai
Performance |
| Timeline |
| Five Point Holdings |
| Sun Hung Kai |
Five Point and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Point and Sun Hung
The main advantage of trading using opposite Five Point and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Point 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.| Five Point vs. Sun Hung Kai | Five Point vs. Bayport International Holdings | Five Point vs. Landsea Homes Corp | Five Point vs. American Realty Investors |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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