Correlation Between Sun Hung and Sino Land
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Sino Land 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 Sino Land 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 Sino Land Co, you can compare the effects of market volatilities on Sun Hung and Sino Land 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 Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Sino Land.
Diversification Opportunities for Sun Hung and Sino Land
Very weak diversification
The 3 months correlation between Sun and Sino is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino 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 Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Sun Hung i.e., Sun Hung and Sino Land go up and down completely randomly.
Pair Corralation between Sun Hung and Sino Land
Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the Sino Land. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sun Hung Kai is 2.17 times less risky than Sino Land. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Sino Land Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Sino Land Co on August 28, 2024 and sell it today you would lose (44.00) from holding Sino Land Co or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.76% |
| Values | Daily Returns |
Sun Hung Kai vs. Sino Land Co
Performance |
| Timeline |
| Sun Hung Kai |
| Sino Land |
Sun Hung and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Sino Land
The main advantage of trading using opposite Sun Hung and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Sino Land 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 Sino Land will offset losses from the drop in Sino Land'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 |
| Sino Land vs. Wharf Holdings | Sino Land vs. Hong Kong Land | Sino Land vs. Sun Hung Kai | Sino Land 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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