Correlation Between Power Assets and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Power Assets 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 Power Assets and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and Sun Hung Kai, you can compare the effects of market volatilities on Power Assets 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 Power Assets with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and Sun Hung.
Diversification Opportunities for Power Assets and Sun Hung
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Power and Sun is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets 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 Power Assets 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 Power Assets 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 Power Assets i.e., Power Assets and Sun Hung go up and down completely randomly.
Pair Corralation between Power Assets and Sun Hung
Assuming the 90 days horizon Power Assets Holdings is expected to generate 1.63 times more return on investment than Sun Hung. However, Power Assets is 1.63 times more volatile than Sun Hung Kai. It trades about 0.04 of its potential returns per unit of risk. Sun Hung Kai is currently generating about -0.04 per unit of risk. If you would invest 467.00 in Power Assets Holdings on November 2, 2024 and sell it today you would earn a total of 178.00 from holding Power Assets Holdings or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Assets Holdings vs. Sun Hung Kai
Performance |
| Timeline |
| Power Assets Holdings |
| Sun Hung Kai |
Power Assets and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and Sun Hung
The main advantage of trading using opposite Power Assets and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets 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.| Power Assets vs. TransAlta Corp | Power Assets vs. Pampa Energia SA | Power Assets vs. Vistra Energy Corp | Power Assets vs. NRG Energy |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |