Correlation Between Sun Hung and Yanlord Land
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Yanlord 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 Yanlord 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 Yanlord Land Group, you can compare the effects of market volatilities on Sun Hung and Yanlord 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 Yanlord Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Yanlord Land.
Diversification Opportunities for Sun Hung and Yanlord Land
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Yanlord is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Yanlord Land Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanlord Land Group 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 Yanlord Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanlord Land Group has no effect on the direction of Sun Hung i.e., Sun Hung and Yanlord Land go up and down completely randomly.
Pair Corralation between Sun Hung and Yanlord Land
Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the Yanlord Land. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sun Hung Kai is 4.76 times less risky than Yanlord Land. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Yanlord Land Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Yanlord Land Group on August 30, 2024 and sell it today you would earn a total of 405.00 from holding Yanlord Land Group or generate 61.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Sun Hung Kai vs. Yanlord Land Group
Performance |
| Timeline |
| Sun Hung Kai |
| Yanlord Land Group |
Sun Hung and Yanlord Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Yanlord Land
The main advantage of trading using opposite Sun Hung and Yanlord Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Yanlord 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 Yanlord Land will offset losses from the drop in Yanlord Land's long position.The idea behind Sun Hung Kai and Yanlord Land Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Yanlord Land vs. Viemed Healthcare | Yanlord Land vs. Southwest Gas Holdings | Yanlord Land vs. BioNTech SE | Yanlord Land vs. NRG Energy |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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