Correlation Between Sun Hung and Country Garden
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Country Garden 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 Country Garden 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 Country Garden Holdings, you can compare the effects of market volatilities on Sun Hung and Country Garden 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 Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Country Garden.
Diversification Opportunities for Sun Hung and Country Garden
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Country is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden 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 Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Sun Hung i.e., Sun Hung and Country Garden go up and down completely randomly.
Pair Corralation between Sun Hung and Country Garden
Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the Country Garden. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sun Hung Kai is 6.57 times less risky than Country Garden. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Country Garden Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 858.00 in Country Garden Holdings on November 2, 2024 and sell it today you would lose (483.00) from holding Country Garden Holdings or give up 56.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.88% |
| Values | Daily Returns |
Sun Hung Kai vs. Country Garden Holdings
Performance |
| Timeline |
| Sun Hung Kai |
| Country Garden Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Sun Hung and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Country Garden
The main advantage of trading using opposite Sun Hung and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden's 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 |
| Country Garden vs. Longfor Properties Co | Country Garden vs. China Overseas Land | Country Garden vs. China Resources Land | Country Garden vs. Anhui Conch Cement |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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