Correlation Between Hong Kong and Creative Media
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Creative Media 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 Hong Kong and Creative Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Creative Media Community, you can compare the effects of market volatilities on Hong Kong and Creative Media 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 Hong Kong with a short position of Creative Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Creative Media.
Diversification Opportunities for Hong Kong and Creative Media
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Creative is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community and Hong Kong 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 Hong Kong Land are associated (or correlated) with Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Hong Kong i.e., Hong Kong and Creative Media go up and down completely randomly.
Pair Corralation between Hong Kong and Creative Media
Assuming the 90 days horizon Hong Kong Land is expected to generate 0.37 times more return on investment than Creative Media. However, Hong Kong Land is 2.68 times less risky than Creative Media. It trades about 0.04 of its potential returns per unit of risk. Creative Media Community is currently generating about -0.15 per unit of risk. If you would invest 2,242 in Hong Kong Land on September 2, 2024 and sell it today you would earn a total of 34.00 from holding Hong Kong Land or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Land vs. Creative Media Community
Performance |
| Timeline |
| Hong Kong Land |
| Creative Media Community |
Hong Kong and Creative Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Creative Media
The main advantage of trading using opposite Hong Kong and Creative Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Creative Media 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 Creative Media will offset losses from the drop in Creative Media's long position.| Hong Kong vs. Wharf Holdings | Hong Kong vs. Holiday Island Holdings | Hong Kong vs. Sun Hung Kai | Hong Kong vs. Bayport International Holdings |
| Creative Media vs. Douglas Emmett | Creative Media vs. Vornado Realty Trust | Creative Media vs. Highwoods Properties | Creative Media vs. Piedmont Office Realty |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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