Correlation Between Hang Lung and NEW WORLD
Can any of the company-specific risk be diversified away by investing in both Hang Lung 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 Hang Lung and NEW WORLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Lung Group and NEW WORLD DEVCO, you can compare the effects of market volatilities on Hang Lung 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 Hang Lung with a short position of NEW WORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Lung and NEW WORLD.
Diversification Opportunities for Hang Lung and NEW WORLD
Pay attention - limited upside
The 3 months correlation between Hang and NEW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hang Lung Group and NEW WORLD DEVCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW WORLD DEVCO and Hang Lung 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 Hang Lung Group 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 DEVCO has no effect on the direction of Hang Lung i.e., Hang Lung and NEW WORLD go up and down completely randomly.
Pair Corralation between Hang Lung and NEW WORLD
If you would invest (100.00) in Hang Lung Group on November 2, 2024 and sell it today you would earn a total of 100.00 from holding Hang Lung Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Hang Lung Group vs. NEW WORLD DEVCO
Performance |
| Timeline |
| Hang Lung Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| NEW WORLD DEVCO |
Hang Lung and NEW WORLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Lung and NEW WORLD
The main advantage of trading using opposite Hang Lung and NEW WORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Lung 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.| Hang Lung vs. MACOM Technology Solutions | Hang Lung vs. Wayside Technology Group | Hang Lung vs. MARKET VECTR RETAIL | Hang Lung vs. CarsalesCom |
| NEW WORLD vs. Tower Semiconductor | NEW WORLD vs. PennantPark Investment | NEW WORLD vs. Taiwan Semiconductor Manufacturing | NEW WORLD vs. Nordic Semiconductor ASA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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