Correlation Between Sun Hung and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Hong Kong 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 Hong Kong 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 Hong Kong Land, you can compare the effects of market volatilities on Sun Hung and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Hong Kong.
Diversification Opportunities for Sun Hung and Hong Kong
Very good diversification
The 3 months correlation between Sun and Hong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Hong Kong Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Land 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Land has no effect on the direction of Sun Hung i.e., Sun Hung and Hong Kong go up and down completely randomly.
Pair Corralation between Sun Hung and Hong Kong
Assuming the 90 days horizon Sun Hung is expected to generate 1.39 times less return on investment than Hong Kong. In addition to that, Sun Hung is 1.84 times more volatile than Hong Kong Land. It trades about 0.03 of its total potential returns per unit of risk. Hong Kong Land is currently generating about 0.07 per unit of volatility. If you would invest 1,527 in Hong Kong Land on October 21, 2024 and sell it today you would earn a total of 645.00 from holding Hong Kong Land or generate 42.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.39% |
| Values | Daily Returns |
Sun Hung Kai vs. Hong Kong Land
Performance |
| Timeline |
| Sun Hung Kai |
| Hong Kong Land |
Sun Hung and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Hong Kong
The main advantage of trading using opposite Sun Hung and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong'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 |
| Hong Kong vs. Wharf Holdings | Hong Kong vs. Holiday Island Holdings | Hong Kong vs. Sun Hung Kai | Hong Kong vs. Bayport International Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |