Correlation Between Sun Hung and Safe
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Safe 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 Safe 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 Safe and Green, you can compare the effects of market volatilities on Sun Hung and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Safe.
Diversification Opportunities for Sun Hung and Safe
Very weak diversification
The 3 months correlation between Sun and Safe is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of Sun Hung i.e., Sun Hung and Safe go up and down completely randomly.
Pair Corralation between Sun Hung and Safe
Assuming the 90 days horizon Sun Hung Kai is expected to generate 0.21 times more return on investment than Safe. However, Sun Hung Kai is 4.82 times less risky than Safe. It trades about -0.08 of its potential returns per unit of risk. Safe and Green is currently generating about -0.12 per unit of risk. If you would invest 997.00 in Sun Hung Kai on November 27, 2024 and sell it today you would lose (66.00) from holding Sun Hung Kai or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Hung Kai vs. Safe and Green
Performance |
| Timeline |
| Sun Hung Kai |
| Safe and Green |
Sun Hung and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Safe
The main advantage of trading using opposite Sun Hung and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe'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 |
| Safe vs. Alternative Investment | Safe vs. Datadog | Safe vs. Delaware Investments Florida | Safe vs. Definitive Healthcare Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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