Correlation Between Longfor Properties and Sino Land
Can any of the company-specific risk be diversified away by investing in both Longfor Properties and Sino 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 Sino 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 Sino Land Co, you can compare the effects of market volatilities on Longfor Properties and Sino 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 Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Properties and Sino Land.
Diversification Opportunities for Longfor Properties and Sino Land
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Longfor and Sino is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Properties Co and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino 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 Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Longfor Properties i.e., Longfor Properties and Sino Land go up and down completely randomly.
Pair Corralation between Longfor Properties and Sino Land
Assuming the 90 days horizon Longfor Properties Co is expected to under-perform the Sino Land. In addition to that, Longfor Properties is 1.45 times more volatile than Sino Land Co. It trades about -0.01 of its total potential returns per unit of risk. Sino Land Co is currently generating about 0.01 per unit of volatility. If you would invest 555.00 in Sino Land Co on August 24, 2024 and sell it today you would lose (55.00) from holding Sino Land Co or give up 9.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.96% |
| Values | Daily Returns |
Longfor Properties Co vs. Sino Land Co
Performance |
| Timeline |
| Longfor Properties |
| Sino Land |
Longfor Properties and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Properties and Sino Land
The main advantage of trading using opposite Longfor Properties and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Properties position performs unexpectedly, Sino 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 Sino Land will offset losses from the drop in Sino Land's long position.| Longfor Properties vs. Sun Hung Kai | Longfor Properties vs. Country Garden Holdings | Longfor Properties vs. Country Garden Holdings | Longfor Properties vs. Sino Land Co |
| Sino Land vs. Wharf Holdings | Sino Land vs. Hong Kong Land | Sino Land vs. Sun Hung Kai | Sino Land vs. Country Garden 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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