Correlation Between Sino Land and New World
Can any of the company-specific risk be diversified away by investing in both Sino Land and New World 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 New World 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 New World Development, you can compare the effects of market volatilities on Sino Land and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and New World.
Diversification Opportunities for Sino Land and New World
Poor diversification
The 3 months correlation between Sino and New is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land Co and New World Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Development 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Development has no effect on the direction of Sino Land i.e., Sino Land and New World go up and down completely randomly.
Pair Corralation between Sino Land and New World
Assuming the 90 days horizon Sino Land Co is expected to under-perform the New World. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sino Land Co is 2.66 times less risky than New World. The pink sheet trades about 0.0 of its potential returns per unit of risk. The New World Development is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 117.00 in New World Development on August 31, 2024 and sell it today you would lose (63.00) from holding New World Development or give up 53.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.7% |
| Values | Daily Returns |
Sino Land Co vs. New World Development
Performance |
| Timeline |
| Sino Land |
| New World Development |
Sino Land and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and New World
The main advantage of trading using opposite Sino Land and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Sino Land vs. HUMANA INC | Sino Land vs. SCOR PK | Sino Land vs. Aquagold International | Sino Land vs. Thrivent High Yield |
| New World vs. SM Prime Holdings | New World vs. Mitsubishi Estate Co | New World vs. New World Development | New World vs. Daito Trust Construction |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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