Correlation Between New York and Hang Lung
Can any of the company-specific risk be diversified away by investing in both New York 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 New York and Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York City and Hang Lung Properties, you can compare the effects of market volatilities on New York 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 New York with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Hang Lung.
Diversification Opportunities for New York and Hang Lung
Good diversification
The 3 months correlation between New and Hang is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding New York City 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 New York 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 New York City 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 New York i.e., New York and Hang Lung go up and down completely randomly.
Pair Corralation between New York and Hang Lung
Considering the 90-day investment horizon New York City is expected to generate 1.74 times more return on investment than Hang Lung. However, New York is 1.74 times more volatile than Hang Lung Properties. It trades about 0.0 of its potential returns per unit of risk. Hang Lung Properties is currently generating about -0.04 per unit of risk. If you would invest 1,472 in New York City on September 3, 2024 and sell it today you would lose (612.00) from holding New York City or give up 41.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York City vs. Hang Lung Properties
Performance |
| Timeline |
| New York City |
| Hang Lung Properties |
New York and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Hang Lung
The main advantage of trading using opposite New York and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.| New York vs. Frp Holdings Ord | New York vs. Marcus Millichap | New York vs. Anywhere Real Estate | New York vs. FirstService Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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