Correlation Between Holiday Island and Daiwa House
Can any of the company-specific risk be diversified away by investing in both Holiday Island and Daiwa House 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 Holiday Island and Daiwa House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holiday Island Holdings and Daiwa House Industry, you can compare the effects of market volatilities on Holiday Island and Daiwa House 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 Holiday Island with a short position of Daiwa House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holiday Island and Daiwa House.
Diversification Opportunities for Holiday Island and Daiwa House
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Holiday and Daiwa is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Holiday Island Holdings and Daiwa House Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiwa House Industry and Holiday Island 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 Holiday Island Holdings are associated (or correlated) with Daiwa House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiwa House Industry has no effect on the direction of Holiday Island i.e., Holiday Island and Daiwa House go up and down completely randomly.
Pair Corralation between Holiday Island and Daiwa House
Given the investment horizon of 90 days Holiday Island Holdings is expected to generate 27.65 times more return on investment than Daiwa House. However, Holiday Island is 27.65 times more volatile than Daiwa House Industry. It trades about 0.07 of its potential returns per unit of risk. Daiwa House Industry is currently generating about 0.06 per unit of risk. If you would invest 1.50 in Holiday Island Holdings on November 2, 2024 and sell it today you would earn a total of 1.30 from holding Holiday Island Holdings or generate 86.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holiday Island Holdings vs. Daiwa House Industry
Performance |
| Timeline |
| Holiday Island Holdings |
| Daiwa House Industry |
Holiday Island and Daiwa House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holiday Island and Daiwa House
The main advantage of trading using opposite Holiday Island and Daiwa House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holiday Island position performs unexpectedly, Daiwa House 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 Daiwa House will offset losses from the drop in Daiwa House's long position.| Holiday Island vs. Hong Kong Land | Holiday Island vs. Wharf Holdings | Holiday Island vs. Sun Hung Kai | Holiday Island vs. Bayport International Holdings |
| Daiwa House vs. Sino Land Co | Daiwa House vs. Sun Hung Kai | Daiwa House vs. Holiday Island Holdings | Daiwa House vs. China Overseas Land |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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