Correlation Between Longfor Properties and Holiday Island
Can any of the company-specific risk be diversified away by investing in both Longfor Properties and Holiday Island 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 Holiday Island 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 Holiday Island Holdings, you can compare the effects of market volatilities on Longfor Properties and Holiday Island 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 Holiday Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Properties and Holiday Island.
Diversification Opportunities for Longfor Properties and Holiday Island
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Longfor and Holiday is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Properties Co and Holiday Island Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Island 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 Holiday Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Island Holdings has no effect on the direction of Longfor Properties i.e., Longfor Properties and Holiday Island go up and down completely randomly.
Pair Corralation between Longfor Properties and Holiday Island
Assuming the 90 days horizon Longfor Properties Co is expected to generate 0.56 times more return on investment than Holiday Island. However, Longfor Properties Co is 1.8 times less risky than Holiday Island. It trades about 0.08 of its potential returns per unit of risk. Holiday Island Holdings is currently generating about 0.02 per unit of risk. If you would invest 1,075 in Longfor Properties Co on August 28, 2024 and sell it today you would earn a total of 286.00 from holding Longfor Properties Co or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longfor Properties Co vs. Holiday Island Holdings
Performance |
| Timeline |
| Longfor Properties |
| Holiday Island Holdings |
Longfor Properties and Holiday Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Properties and Holiday Island
The main advantage of trading using opposite Longfor Properties and Holiday Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Properties position performs unexpectedly, Holiday Island 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 Holiday Island will offset losses from the drop in Holiday Island'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 |
| Holiday Island vs. Smart REIT | Holiday Island vs. Phillips Edison Co | Holiday Island vs. Simon Property Group | Holiday Island vs. Inventrust Properties Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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