Correlation Between Leju Holdings and Southcorp Capital
Can any of the company-specific risk be diversified away by investing in both Leju Holdings and Southcorp Capital 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 Leju Holdings and Southcorp Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leju Holdings Limited and Southcorp Capital, you can compare the effects of market volatilities on Leju Holdings and Southcorp Capital 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 Leju Holdings with a short position of Southcorp Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leju Holdings and Southcorp Capital.
Diversification Opportunities for Leju Holdings and Southcorp Capital
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leju and Southcorp is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Leju Holdings Limited and Southcorp Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southcorp Capital and Leju Holdings 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 Leju Holdings Limited are associated (or correlated) with Southcorp Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southcorp Capital has no effect on the direction of Leju Holdings i.e., Leju Holdings and Southcorp Capital go up and down completely randomly.
Pair Corralation between Leju Holdings and Southcorp Capital
Given the investment horizon of 90 days Leju Holdings is expected to generate 32.19 times less return on investment than Southcorp Capital. But when comparing it to its historical volatility, Leju Holdings Limited is 11.39 times less risky than Southcorp Capital. It trades about 0.06 of its potential returns per unit of risk. Southcorp Capital is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Southcorp Capital on August 24, 2024 and sell it today you would earn a total of 0.30 from holding Southcorp Capital or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Leju Holdings Limited vs. Southcorp Capital
Performance |
| Timeline |
| Leju Holdings Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Southcorp Capital |
Leju Holdings and Southcorp Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leju Holdings and Southcorp Capital
The main advantage of trading using opposite Leju Holdings and Southcorp Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leju Holdings position performs unexpectedly, Southcorp Capital 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 Southcorp Capital will offset losses from the drop in Southcorp Capital's long position.| Leju Holdings vs. Ucommune International | Leju Holdings vs. Fangdd Network Group | Leju Holdings vs. Jammin Java Corp | Leju Holdings vs. Avalon GloboCare Corp |
| Southcorp Capital vs. Fangdd Network Group | Southcorp Capital vs. MDJM | Southcorp Capital vs. Frp Holdings Ord | Southcorp Capital vs. Marcus Millichap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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