Correlation Between Sweeten Real and Farglory Land

Can any of the company-specific risk be diversified away by investing in both Sweeten Real and Farglory 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 Sweeten Real and Farglory Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sweeten Real Estate and Farglory Land Development, you can compare the effects of market volatilities on Sweeten Real and Farglory 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 Sweeten Real with a short position of Farglory Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweeten Real and Farglory Land.

Diversification Opportunities for Sweeten Real and Farglory Land

-0.39

Correlation Coefficient

Sweeten Real  Farglory Land

Very good diversification

The 3 months correlation between Sweeten and Farglory is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sweeten Real Estate and Farglory Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory Land Development and Sweeten Real 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 Sweeten Real Estate are associated (or correlated) with Farglory Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory Land Development has no effect on the direction of Sweeten Real i.e., Sweeten Real and Farglory Land go up and down completely randomly.

Pair Corralation between Sweeten Real and Farglory Land

Assuming the 90 days trading horizon Sweeten Real Estate is expected to under-perform the Farglory Land. But the stock apears to be less risky and, when comparing its historical volatility, Sweeten Real Estate is 1.83 times less risky than Farglory Land. The stock trades about -0.02 of its potential returns per unit of risk. The Farglory Land Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,920  in Farglory Land Development on October 24, 2024 and sell it today you would earn a total of  580.00  from holding Farglory Land Development or generate 8.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sweeten Real Estate  vs.  Farglory Land Development

Sweeten Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweeten Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sweeten Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Farglory Land Development

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Farglory Land Development are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Farglory Land may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sweeten Real and Farglory Land

The main advantage of trading using opposite Sweeten Real and Farglory Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweeten Real position performs unexpectedly, Farglory 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 Farglory Land will offset losses from the drop in Farglory Land's long position.

The idea behind Sweeten Real Estate and Farglory Land Development 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.