Correlation Between Sino Land and Daiwa House
Can any of the company-specific risk be diversified away by investing in both Sino Land and Daiwa House 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 Daiwa House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino Land and Daiwa House Industry, you can compare the effects of market volatilities on Sino Land and Daiwa House 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 Daiwa House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Land and Daiwa House.
Diversification Opportunities for Sino Land and Daiwa House
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sino and Daiwa is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sino Land and Daiwa House Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiwa House Industry 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 are associated (or correlated) with Daiwa House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiwa House Industry has no effect on the direction of Sino Land i.e., Sino Land and Daiwa House go up and down completely randomly.
Pair Corralation between Sino Land and Daiwa House
Assuming the 90 days horizon Sino Land is expected to under-perform the Daiwa House. But the stock apears to be less risky and, when comparing its historical volatility, Sino Land is 1.18 times less risky than Daiwa House. The stock trades about -0.03 of its potential returns per unit of risk. The Daiwa House Industry is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,840 in Daiwa House Industry on September 27, 2024 and sell it today you would earn a total of 100.00 from holding Daiwa House Industry or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Land vs. Daiwa House Industry
Performance |
| Timeline |
| Sino Land |
| Daiwa House Industry |
Sino Land and Daiwa House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Land and Daiwa House
The main advantage of trading using opposite Sino Land and Daiwa House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Land position performs unexpectedly, Daiwa House 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 Daiwa House will offset losses from the drop in Daiwa House's long position.| Sino Land vs. Sun Hung Kai | Sino Land vs. China Overseas Land | Sino Land vs. Mitsubishi Estate Co | Sino Land vs. Deutsche Wohnen SE |
| Daiwa House vs. Sun Hung Kai | Daiwa House vs. China Overseas Land | Daiwa House vs. Mitsubishi Estate Co | Daiwa House vs. Sino 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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