Correlation Between Wharf Holdings and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Wharf Holdings and Sun Hung 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 Sun Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wharf Holdings and Sun Hung Kai, you can compare the effects of market volatilities on Wharf Holdings and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wharf Holdings and Sun Hung.
Diversification Opportunities for Wharf Holdings and Sun Hung
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wharf and Sun is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wharf Holdings and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of Wharf Holdings i.e., Wharf Holdings and Sun Hung go up and down completely randomly.
Pair Corralation between Wharf Holdings and Sun Hung
Assuming the 90 days horizon Wharf Holdings is expected to generate 3.0 times less return on investment than Sun Hung. But when comparing it to its historical volatility, Wharf Holdings is 2.39 times less risky than Sun Hung. It trades about 0.02 of its potential returns per unit of risk. Sun Hung Kai is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,153 in Sun Hung Kai on November 2, 2024 and sell it today you would lose (255.00) from holding Sun Hung Kai or give up 22.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.58% |
| Values | Daily Returns |
Wharf Holdings vs. Sun Hung Kai
Performance |
| Timeline |
| Wharf Holdings |
| Sun Hung Kai |
Wharf Holdings and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wharf Holdings and Sun Hung
The main advantage of trading using opposite Wharf Holdings and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wharf Holdings position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung'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 |
| Sun Hung vs. Sino Land Co | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Daiwa House Industry | Sun Hung vs. China Overseas Land |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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