Correlation Between Sun Hung and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Vonovia SE 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 Vonovia SE 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 Vonovia SE, you can compare the effects of market volatilities on Sun Hung and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Vonovia SE.
Diversification Opportunities for Sun Hung and Vonovia SE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sun and Vonovia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of Sun Hung i.e., Sun Hung and Vonovia SE go up and down completely randomly.
Pair Corralation between Sun Hung and Vonovia SE
Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the Vonovia SE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sun Hung Kai is 2.43 times less risky than Vonovia SE. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Vonovia SE is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,348 in Vonovia SE on September 3, 2024 and sell it today you would earn a total of 927.00 from holding Vonovia SE or generate 39.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.71% |
| Values | Daily Returns |
Sun Hung Kai vs. Vonovia SE
Performance |
| Timeline |
| Sun Hung Kai |
| Vonovia SE |
Sun Hung and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Vonovia SE
The main advantage of trading using opposite Sun Hung and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE'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 |
| Vonovia SE vs. Vonovia SE ADR | Vonovia SE vs. CBRE Group Class | Vonovia SE vs. Opendoor Technologies | Vonovia SE vs. Jones Lang LaSalle |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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