Correlation Between Sino Land and Wharf Holdings
Can any of the company-specific risk be diversified away by investing in both Sino Land and Wharf Holdings 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 Wharf Holdings 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 Wharf Holdings, you can compare the effects of market volatilities on Sino Land and Wharf Holdings 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 Wharf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and Wharf Holdings.
Diversification Opportunities for Sino Land and Wharf Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sino and Wharf is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land Co and Wharf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf 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 Wharf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Holdings has no effect on the direction of Sino Land i.e., Sino Land and Wharf Holdings go up and down completely randomly.
Pair Corralation between Sino Land and Wharf Holdings
Assuming the 90 days horizon Sino Land is expected to generate 1.5 times less return on investment than Wharf Holdings. In addition to that, Sino Land is 1.35 times more volatile than Wharf Holdings. It trades about 0.01 of its total potential returns per unit of risk. Wharf Holdings is currently generating about 0.02 per unit of volatility. If you would invest 530.00 in Wharf Holdings on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Wharf Holdings or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sino Land Co vs. Wharf Holdings
Performance |
| Timeline |
| Sino Land |
| Wharf Holdings |
Sino Land and Wharf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and Wharf Holdings
The main advantage of trading using opposite Sino Land and Wharf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, Wharf Holdings 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 Wharf Holdings will offset losses from the drop in Wharf Holdings' 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 |
| Wharf Holdings vs. Sun Hung Kai | Wharf Holdings vs. Sun Hung Kai | Wharf Holdings vs. China Resources Land | Wharf Holdings vs. China Resources Land |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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