Correlation Between GuocoLand and Hufvudstaden
Can any of the company-specific risk be diversified away by investing in both GuocoLand and Hufvudstaden 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 GuocoLand and Hufvudstaden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GuocoLand Limited and Hufvudstaden AB, you can compare the effects of market volatilities on GuocoLand and Hufvudstaden 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 GuocoLand with a short position of Hufvudstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of GuocoLand and Hufvudstaden.
Diversification Opportunities for GuocoLand and Hufvudstaden
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GuocoLand and Hufvudstaden is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GuocoLand Limited and Hufvudstaden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hufvudstaden AB and GuocoLand 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 GuocoLand Limited are associated (or correlated) with Hufvudstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hufvudstaden AB has no effect on the direction of GuocoLand i.e., GuocoLand and Hufvudstaden go up and down completely randomly.
Pair Corralation between GuocoLand and Hufvudstaden
Assuming the 90 days trading horizon GuocoLand Limited is expected to generate 0.72 times more return on investment than Hufvudstaden. However, GuocoLand Limited is 1.39 times less risky than Hufvudstaden. It trades about 0.13 of its potential returns per unit of risk. Hufvudstaden AB is currently generating about -0.17 per unit of risk. If you would invest 103.00 in GuocoLand Limited on August 29, 2024 and sell it today you would earn a total of 3.00 from holding GuocoLand Limited or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GuocoLand Limited vs. Hufvudstaden AB
Performance |
| Timeline |
| GuocoLand Limited |
| Hufvudstaden AB |
GuocoLand and Hufvudstaden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GuocoLand and Hufvudstaden
The main advantage of trading using opposite GuocoLand and Hufvudstaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GuocoLand position performs unexpectedly, Hufvudstaden 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 Hufvudstaden will offset losses from the drop in Hufvudstaden's long position.| GuocoLand vs. Microbot Medical | GuocoLand vs. BURLINGTON STORES | GuocoLand vs. JIAHUA STORES | GuocoLand vs. ONWARD MEDICAL BV |
| Hufvudstaden vs. NorAm Drilling AS | Hufvudstaden vs. Pembina Pipeline Corp | Hufvudstaden vs. EEDUCATION ALBERT AB | Hufvudstaden vs. GigaMedia |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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