Correlation Between Yanlord Land and City Developments
Can any of the company-specific risk be diversified away by investing in both Yanlord Land and City Developments 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 Yanlord Land and City Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yanlord Land Group and City Developments Limited, you can compare the effects of market volatilities on Yanlord Land and City Developments 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 Yanlord Land with a short position of City Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanlord Land and City Developments.
Diversification Opportunities for Yanlord Land and City Developments
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yanlord and City is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Yanlord Land Group and City Developments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Developments and Yanlord Land 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 Yanlord Land Group are associated (or correlated) with City Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Developments has no effect on the direction of Yanlord Land i.e., Yanlord Land and City Developments go up and down completely randomly.
Pair Corralation between Yanlord Land and City Developments
Assuming the 90 days horizon Yanlord Land Group is expected to generate 2.14 times more return on investment than City Developments. However, Yanlord Land is 2.14 times more volatile than City Developments Limited. It trades about 0.03 of its potential returns per unit of risk. City Developments Limited is currently generating about -0.04 per unit of risk. If you would invest 962.00 in Yanlord Land Group on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Yanlord Land Group or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 34.08% |
| Values | Daily Returns |
Yanlord Land Group vs. City Developments Limited
Performance |
| Timeline |
| Yanlord Land Group |
| City Developments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yanlord Land and City Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yanlord Land and City Developments
The main advantage of trading using opposite Yanlord Land and City Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanlord Land position performs unexpectedly, City Developments 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 City Developments will offset losses from the drop in City Developments' long position.| Yanlord Land vs. Hong Kong Land | Yanlord Land vs. Holiday Island Holdings | Yanlord Land vs. Sun Hung Kai |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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