Correlation Between Sino Land and China Overseas
Can any of the company-specific risk be diversified away by investing in both Sino Land and China Overseas 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 Sino Land and China Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino Land Co and China Overseas Land, you can compare the effects of market volatilities on Sino Land and China Overseas 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 Sino Land with a short position of China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and China Overseas.
Diversification Opportunities for Sino Land and China Overseas
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sino and China is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land Co and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and Sino Land 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 Sino Land Co are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Sino Land i.e., Sino Land and China Overseas go up and down completely randomly.
Pair Corralation between Sino Land and China Overseas
Assuming the 90 days horizon Sino Land Co is expected to generate 0.56 times more return on investment than China Overseas. However, Sino Land Co is 1.8 times less risky than China Overseas. It trades about -0.1 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.21 per unit of risk. If you would invest 511.00 in Sino Land Co on August 28, 2024 and sell it today you would lose (19.00) from holding Sino Land Co or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Land Co vs. China Overseas Land
Performance |
| Timeline |
| Sino Land |
| China Overseas Land |
Sino Land and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and China Overseas
The main advantage of trading using opposite Sino Land and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| Sino Land vs. Wharf Holdings | Sino Land vs. Hong Kong Land | Sino Land vs. Sun Hung Kai | Sino Land vs. Country Garden Holdings |
| China Overseas vs. Longfor Group Holdings | China Overseas vs. Sun Hung Kai | China Overseas vs. Country Garden Holdings | China Overseas vs. Sino Land Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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