Correlation Between Sun Hung and CLP Holdings
Can any of the company-specific risk be diversified away by investing in both Sun Hung and CLP 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 Sun Hung and CLP Holdings 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 CLP Holdings, you can compare the effects of market volatilities on Sun Hung and CLP 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 Sun Hung with a short position of CLP Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and CLP Holdings.
Diversification Opportunities for Sun Hung and CLP Holdings
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and CLP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and CLP Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLP Holdings 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 CLP Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLP Holdings has no effect on the direction of Sun Hung i.e., Sun Hung and CLP Holdings go up and down completely randomly.
Pair Corralation between Sun Hung and CLP Holdings
Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the CLP Holdings. In addition to that, Sun Hung is 1.1 times more volatile than CLP Holdings. It trades about -0.01 of its total potential returns per unit of risk. CLP Holdings is currently generating about 0.05 per unit of volatility. If you would invest 644.00 in CLP Holdings on August 29, 2024 and sell it today you would earn a total of 195.00 from holding CLP Holdings or generate 30.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sun Hung Kai vs. CLP Holdings
Performance |
| Timeline |
| Sun Hung Kai |
| CLP Holdings |
Sun Hung and CLP Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and CLP Holdings
The main advantage of trading using opposite Sun Hung and CLP Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, CLP 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 CLP Holdings will offset losses from the drop in CLP Holdings' long position.| Sun Hung vs. Hong Kong Land | Sun Hung vs. Wharf Holdings | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Bayport International Holdings |
| CLP Holdings vs. Hong Kong and | CLP Holdings vs. Power Assets Holdings | CLP Holdings vs. Swire Pacific | CLP Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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