Correlation Between Sun Hung and EGRNF
Can any of the company-specific risk be diversified away by investing in both Sun Hung and EGRNF 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 Sun Hung and EGRNF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Hung Kai and EGRNF, you can compare the effects of market volatilities on Sun Hung and EGRNF 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 Sun Hung with a short position of EGRNF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and EGRNF.
Diversification Opportunities for Sun Hung and EGRNF
Very good diversification
The 3 months correlation between Sun and EGRNF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and EGRNF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGRNF and Sun Hung 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 Sun Hung Kai are associated (or correlated) with EGRNF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGRNF has no effect on the direction of Sun Hung i.e., Sun Hung and EGRNF go up and down completely randomly.
Pair Corralation between Sun Hung and EGRNF
Assuming the 90 days horizon Sun Hung is expected to generate 318.97 times less return on investment than EGRNF. But when comparing it to its historical volatility, Sun Hung Kai is 42.03 times less risky than EGRNF. It trades about 0.02 of its potential returns per unit of risk. EGRNF is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.30 in EGRNF on August 28, 2024 and sell it today you would lose (0.27) from holding EGRNF or give up 90.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Sun Hung Kai vs. EGRNF
Performance |
| Timeline |
| Sun Hung Kai |
| EGRNF |
Sun Hung and EGRNF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and EGRNF
The main advantage of trading using opposite Sun Hung and EGRNF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, EGRNF 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 EGRNF will offset losses from the drop in EGRNF's long position.| Sun Hung vs. Sino Land Co | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Daiwa House Industry | Sun Hung vs. China Overseas Land |
| EGRNF vs. Hong Kong Land | EGRNF vs. Wharf Holdings | EGRNF vs. Holiday Island Holdings | EGRNF vs. Sun Hung Kai |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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