Correlation Between Holiday Island and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Holiday Island 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 Holiday Island and Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on Holiday Island 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 Holiday Island with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holiday Island and Sun Hung.
Diversification Opportunities for Holiday Island and Sun Hung
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holiday and Sun is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Holiday Island 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 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 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 Holiday Island i.e., Holiday Island and Sun Hung go up and down completely randomly.
Pair Corralation between Holiday Island and Sun Hung
Given the investment horizon of 90 days Holiday Island Holdings is expected to generate 7.8 times more return on investment than Sun Hung. However, Holiday Island is 7.8 times more volatile than Sun Hung Kai. It trades about 0.06 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 1.80 in Holiday Island Holdings on August 28, 2024 and sell it today you would earn a total of 0.07 from holding Holiday Island Holdings or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.74% |
| Values | Daily Returns |
Holiday Island Holdings vs. Sun Hung Kai
Performance |
| Timeline |
| Holiday Island Holdings |
| Sun Hung Kai |
Holiday Island and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holiday Island and Sun Hung
The main advantage of trading using opposite Holiday Island and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holiday Island 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.| Holiday Island vs. Smart REIT | Holiday Island vs. Phillips Edison Co | Holiday Island vs. Simon Property Group | Holiday Island vs. Inventrust Properties Corp |
| Sun Hung vs. Sino Land Co | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Daiwa House Industry | Sun Hung 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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