Correlation Between Hong Kong and Segro Plc
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Segro Plc 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 Segro Plc 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 Segro Plc, you can compare the effects of market volatilities on Hong Kong and Segro Plc 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 Segro Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Segro Plc.
Diversification Opportunities for Hong Kong and Segro Plc
Pay attention - limited upside
The 3 months correlation between Hong and Segro is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Segro Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segro Plc 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 Segro Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segro Plc has no effect on the direction of Hong Kong i.e., Hong Kong and Segro Plc go up and down completely randomly.
Pair Corralation between Hong Kong and Segro Plc
Assuming the 90 days horizon Hong Kong Land is expected to generate 1.14 times more return on investment than Segro Plc. However, Hong Kong is 1.14 times more volatile than Segro Plc. It trades about 0.23 of its potential returns per unit of risk. Segro Plc is currently generating about -0.09 per unit of risk. If you would invest 1,985 in Hong Kong Land on August 28, 2024 and sell it today you would earn a total of 355.00 from holding Hong Kong Land or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Land vs. Segro Plc
Performance |
| Timeline |
| Hong Kong Land |
| Segro Plc |
Hong Kong and Segro Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Segro Plc
The main advantage of trading using opposite Hong Kong and Segro Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Segro Plc 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 Segro Plc will offset losses from the drop in Segro Plc'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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