Correlation Between Swire Pacific and Henderson Land
Can any of the company-specific risk be diversified away by investing in both Swire Pacific and Henderson 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 Swire Pacific and Henderson Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Pacific and Henderson Land Development, you can compare the effects of market volatilities on Swire Pacific and Henderson 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 Swire Pacific with a short position of Henderson Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Pacific and Henderson Land.
Diversification Opportunities for Swire Pacific and Henderson Land
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swire and Henderson is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Swire Pacific and Henderson Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Land Devel and Swire Pacific 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 Swire Pacific are associated (or correlated) with Henderson Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Land Devel has no effect on the direction of Swire Pacific i.e., Swire Pacific and Henderson Land go up and down completely randomly.
Pair Corralation between Swire Pacific and Henderson Land
Assuming the 90 days horizon Swire Pacific is expected to generate 0.93 times more return on investment than Henderson Land. However, Swire Pacific is 1.07 times less risky than Henderson Land. It trades about 0.1 of its potential returns per unit of risk. Henderson Land Development is currently generating about -0.09 per unit of risk. If you would invest 901.00 in Swire Pacific on October 23, 2024 and sell it today you would earn a total of 24.00 from holding Swire Pacific or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swire Pacific vs. Henderson Land Development
Performance |
| Timeline |
| Swire Pacific |
| Henderson Land Devel |
Swire Pacific and Henderson Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Pacific and Henderson Land
The main advantage of trading using opposite Swire Pacific and Henderson Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Pacific position performs unexpectedly, Henderson 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 Henderson Land will offset losses from the drop in Henderson Land's long position.| Swire Pacific vs. Alliance Recovery | Swire Pacific vs. Ayala | Swire Pacific vs. Alaska Power Telephone | Swire Pacific vs. Ayala Corp ADR |
| Henderson Land vs. Hang Lung Properties | Henderson Land vs. Sun Hung Kai | Henderson Land vs. Hong Kong and | Henderson Land vs. New World Development |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |