Correlation Between Sun Hung and Longfor Group
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Longfor Group 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 Longfor Group 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 Longfor Group Holdings, you can compare the effects of market volatilities on Sun Hung and Longfor Group 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 Longfor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Longfor Group.
Diversification Opportunities for Sun Hung and Longfor Group
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sun and Longfor is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Longfor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Group 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 Longfor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Group Holdings has no effect on the direction of Sun Hung i.e., Sun Hung and Longfor Group go up and down completely randomly.
Pair Corralation between Sun Hung and Longfor Group
If you would invest 171.00 in Longfor Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Longfor Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sun Hung Kai vs. Longfor Group Holdings
Performance |
| Timeline |
| Sun Hung Kai |
| Longfor Group Holdings |
Sun Hung and Longfor Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Longfor Group
The main advantage of trading using opposite Sun Hung and Longfor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Longfor Group 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 Longfor Group will offset losses from the drop in Longfor Group'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 |
| Longfor Group vs. China Overseas Land | Longfor Group vs. Sun Hung Kai | Longfor Group vs. Country Garden 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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