Correlation Between Henderson Land and New World
Can any of the company-specific risk be diversified away by investing in both Henderson Land and New World 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 Henderson Land and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Land and New World Development, you can compare the effects of market volatilities on Henderson Land and New World 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 Henderson Land with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Land and New World.
Diversification Opportunities for Henderson Land and New World
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Henderson and New is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Land and New World Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Development and Henderson Land 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 Henderson Land are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Development has no effect on the direction of Henderson Land i.e., Henderson Land and New World go up and down completely randomly.
Pair Corralation between Henderson Land and New World
Assuming the 90 days horizon Henderson Land is expected to generate 1.03 times more return on investment than New World. However, Henderson Land is 1.03 times more volatile than New World Development. It trades about 0.03 of its potential returns per unit of risk. New World Development is currently generating about -0.01 per unit of risk. If you would invest 308.00 in Henderson Land on August 28, 2024 and sell it today you would lose (18.00) from holding Henderson Land or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 51.55% |
| Values | Daily Returns |
Henderson Land vs. New World Development
Performance |
| Timeline |
| Henderson Land |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New World Development |
Henderson Land and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Land and New World
The main advantage of trading using opposite Henderson Land and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Land position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Henderson Land vs. St Joe Company | Henderson Land vs. Stratus Properties | Henderson Land vs. Mitsui Fudosan Co | Henderson Land vs. New World Development |
| New World vs. Sun Hung Kai | New World vs. Hang Lung Properties | New World vs. Swire Pacific | New World vs. Sino Land Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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