Correlation Between Longfor Properties and CK Asset
Can any of the company-specific risk be diversified away by investing in both Longfor Properties and CK Asset 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 Longfor Properties and CK Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longfor Properties Co and CK Asset Holdings, you can compare the effects of market volatilities on Longfor Properties and CK Asset 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 Longfor Properties with a short position of CK Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Properties and CK Asset.
Diversification Opportunities for Longfor Properties and CK Asset
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Longfor and CHKGF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Properties Co and CK Asset Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Asset Holdings and Longfor Properties 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 Longfor Properties Co are associated (or correlated) with CK Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Asset Holdings has no effect on the direction of Longfor Properties i.e., Longfor Properties and CK Asset go up and down completely randomly.
Pair Corralation between Longfor Properties and CK Asset
Assuming the 90 days horizon Longfor Properties Co is expected to generate 1.48 times more return on investment than CK Asset. However, Longfor Properties is 1.48 times more volatile than CK Asset Holdings. It trades about 0.0 of its potential returns per unit of risk. CK Asset Holdings is currently generating about -0.03 per unit of risk. If you would invest 2,201 in Longfor Properties Co on August 31, 2024 and sell it today you would lose (822.00) from holding Longfor Properties Co or give up 37.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.5% |
| Values | Daily Returns |
Longfor Properties Co vs. CK Asset Holdings
Performance |
| Timeline |
| Longfor Properties |
| CK Asset Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Longfor Properties and CK Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Properties and CK Asset
The main advantage of trading using opposite Longfor Properties and CK Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Properties position performs unexpectedly, CK Asset 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 CK Asset will offset losses from the drop in CK Asset's long position.| Longfor Properties vs. Sun Hung Kai | Longfor Properties vs. Country Garden Holdings | Longfor Properties vs. Sino Land Co | Longfor Properties vs. Sun Hung Kai |
| CK Asset vs. Hong Kong Land | CK Asset vs. Sino Land Co | CK Asset vs. CK Hutchison Holdings | CK Asset vs. CK Hutchison Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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