Correlation Between Hong Kong and Yanlord Land
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Yanlord Land 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 Yanlord Land 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 Yanlord Land Group, you can compare the effects of market volatilities on Hong Kong and Yanlord Land 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 Yanlord Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Yanlord Land.
Diversification Opportunities for Hong Kong and Yanlord Land
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hong and Yanlord is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Yanlord Land Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanlord Land Group 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 Yanlord Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanlord Land Group has no effect on the direction of Hong Kong i.e., Hong Kong and Yanlord Land go up and down completely randomly.
Pair Corralation between Hong Kong and Yanlord Land
Assuming the 90 days horizon Hong Kong Land is expected to generate 0.52 times more return on investment than Yanlord Land. However, Hong Kong Land is 1.93 times less risky than Yanlord Land. It trades about 0.1 of its potential returns per unit of risk. Yanlord Land Group is currently generating about 0.03 per unit of risk. If you would invest 1,565 in Hong Kong Land on September 12, 2024 and sell it today you would earn a total of 881.00 from holding Hong Kong Land or generate 56.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Land vs. Yanlord Land Group
Performance |
| Timeline |
| Hong Kong Land |
| Yanlord Land Group |
Hong Kong and Yanlord Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Yanlord Land
The main advantage of trading using opposite Hong Kong and Yanlord Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Yanlord Land 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 Yanlord Land will offset losses from the drop in Yanlord Land's long position.| Hong Kong vs. Sino Land Co | Hong Kong vs. Holiday Island Holdings | Hong Kong vs. Daiwa House Industry | Hong Kong vs. China Overseas Land |
| Yanlord Land vs. CECO Environmental Corp | Yanlord Land vs. Sabre Corpo | Yanlord Land vs. Griffon | Yanlord Land vs. Hurco Companies |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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