Correlation Between Longfor Properties and International Land
Can any of the company-specific risk be diversified away by investing in both Longfor Properties and International 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 Longfor Properties and International Land 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 International Land Alliance, you can compare the effects of market volatilities on Longfor Properties and International 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 Longfor Properties with a short position of International Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Properties and International Land.
Diversification Opportunities for Longfor Properties and International Land
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Longfor and International is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Properties Co and International Land Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Land 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 International Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Land has no effect on the direction of Longfor Properties i.e., Longfor Properties and International Land go up and down completely randomly.
Pair Corralation between Longfor Properties and International Land
Assuming the 90 days horizon Longfor Properties Co is expected to under-perform the International Land. But the pink sheet apears to be less risky and, when comparing its historical volatility, Longfor Properties Co is 3.22 times less risky than International Land. The pink sheet trades about -0.02 of its potential returns per unit of risk. The International Land Alliance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17.00 in International Land Alliance on October 21, 2024 and sell it today you would lose (3.00) from holding International Land Alliance or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longfor Properties Co vs. International Land Alliance
Performance |
| Timeline |
| Longfor Properties |
| International Land |
Longfor Properties and International Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Properties and International Land
The main advantage of trading using opposite Longfor Properties and International Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Properties position performs unexpectedly, International 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 International Land will offset losses from the drop in International Land'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 |
| International Land vs. Hong Kong Land | International Land vs. Wharf Holdings | International Land vs. Holiday Island Holdings | International Land vs. Sun Hung Kai |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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