Correlation Between Longfor Group and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Longfor Group and Sun Hung 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 Group and Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longfor Group Holdings and Sun Hung Kai, you can compare the effects of market volatilities on Longfor Group and Sun Hung 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 Group with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Group and Sun Hung.
Diversification Opportunities for Longfor Group and Sun Hung
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Longfor and Sun is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Group Holdings and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai and Longfor Group 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 Group Holdings are associated (or correlated) with Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of Longfor Group i.e., Longfor Group and Sun Hung go up and down completely randomly.
Pair Corralation between Longfor Group and Sun Hung
If you would invest 171.00 in Longfor Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Longfor Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Longfor Group Holdings vs. Sun Hung Kai
Performance |
| Timeline |
| Longfor Group Holdings |
| Sun Hung Kai |
Longfor Group and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Group and Sun Hung
The main advantage of trading using opposite Longfor Group and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Group position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.| Longfor Group vs. China Overseas Land | Longfor Group vs. Sun Hung Kai | Longfor Group vs. Country Garden Holdings |
| Sun Hung vs. Hong Kong Land | Sun Hung vs. Wharf Holdings | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Bayport International 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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