Correlation Between Sino Land and Holiday Island
Can any of the company-specific risk be diversified away by investing in both Sino Land and Holiday Island 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 Holiday Island 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 Holiday Island Holdings, you can compare the effects of market volatilities on Sino Land and Holiday Island 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 Holiday Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and Holiday Island.
Diversification Opportunities for Sino Land and Holiday Island
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sino and Holiday is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land Co and Holiday Island Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Island Holdings 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 Holiday Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Island Holdings has no effect on the direction of Sino Land i.e., Sino Land and Holiday Island go up and down completely randomly.
Pair Corralation between Sino Land and Holiday Island
Assuming the 90 days horizon Sino Land is expected to generate 9.01 times less return on investment than Holiday Island. But when comparing it to its historical volatility, Sino Land Co is 5.62 times less risky than Holiday Island. It trades about 0.01 of its potential returns per unit of risk. Holiday Island Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.01 in Holiday Island Holdings on August 28, 2024 and sell it today you would lose (1.14) from holding Holiday Island Holdings or give up 37.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Land Co vs. Holiday Island Holdings
Performance |
| Timeline |
| Sino Land |
| Holiday Island Holdings |
Sino Land and Holiday Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and Holiday Island
The main advantage of trading using opposite Sino Land and Holiday Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, Holiday Island 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 Holiday Island will offset losses from the drop in Holiday Island's 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 |
| Holiday Island vs. Smart REIT | Holiday Island vs. Phillips Edison Co | Holiday Island vs. Simon Property Group | Holiday Island vs. Inventrust Properties Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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