Correlation Between Wharf Holdings and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Wharf Holdings and Hong Kong 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 Wharf Holdings and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wharf Holdings and Hong Kong Land, you can compare the effects of market volatilities on Wharf Holdings and Hong Kong 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 Wharf Holdings with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wharf Holdings and Hong Kong.
Diversification Opportunities for Wharf Holdings and Hong Kong
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wharf and Hong is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wharf Holdings and Hong Kong Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Land and Wharf Holdings 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 Wharf Holdings are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Land has no effect on the direction of Wharf Holdings i.e., Wharf Holdings and Hong Kong go up and down completely randomly.
Pair Corralation between Wharf Holdings and Hong Kong
Assuming the 90 days horizon Wharf Holdings is expected to generate 1.41 times more return on investment than Hong Kong. However, Wharf Holdings is 1.41 times more volatile than Hong Kong Land. It trades about 0.02 of its potential returns per unit of risk. Hong Kong Land is currently generating about 0.01 per unit of risk. If you would invest 463.00 in Wharf Holdings on November 2, 2024 and sell it today you would earn a total of 26.00 from holding Wharf Holdings or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.95% |
| Values | Daily Returns |
Wharf Holdings vs. Hong Kong Land
Performance |
| Timeline |
| Wharf Holdings |
| Hong Kong Land |
Wharf Holdings and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wharf Holdings and Hong Kong
The main advantage of trading using opposite Wharf Holdings and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wharf Holdings position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Wharf Holdings vs. Sino Land Co | Wharf Holdings vs. Hong Kong Land | Wharf Holdings vs. Holiday Island Holdings | Wharf Holdings vs. Sun Hung Kai |
| Hong Kong vs. Wharf Holdings | Hong Kong vs. Holiday Island Holdings | Hong Kong vs. Sun Hung Kai | Hong Kong vs. Bayport International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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