Correlation Between Newmark and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Newmark and Hang Lung 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 Newmark and Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and Hang Lung Properties, you can compare the effects of market volatilities on Newmark and Hang Lung 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 Newmark with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and Hang Lung.
Diversification Opportunities for Newmark and Hang Lung
Weak diversification
The 3 months correlation between Newmark and Hang is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Hang Lung Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Properties and Newmark 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 Newmark Group are associated (or correlated) with Hang Lung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Lung Properties has no effect on the direction of Newmark i.e., Newmark and Hang Lung go up and down completely randomly.
Pair Corralation between Newmark and Hang Lung
Given the investment horizon of 90 days Newmark Group is expected to generate 0.67 times more return on investment than Hang Lung. However, Newmark Group is 1.5 times less risky than Hang Lung. It trades about 0.18 of its potential returns per unit of risk. Hang Lung Properties is currently generating about -0.02 per unit of risk. If you would invest 1,462 in Newmark Group on September 3, 2024 and sell it today you would earn a total of 86.00 from holding Newmark Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. Hang Lung Properties
Performance |
| Timeline |
| Newmark Group |
| Hang Lung Properties |
Newmark and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and Hang Lung
The main advantage of trading using opposite Newmark and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, Hang Lung 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 Hang Lung will offset losses from the drop in Hang Lung's long position.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| Hang Lung vs. Ascendas India Trust | Hang Lung vs. Asia Pptys | Hang Lung vs. Adler Group SA | Hang Lung vs. Aztec Land Comb |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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