Correlation Between Henderson Land and MSAD Insurance
Can any of the company-specific risk be diversified away by investing in both Henderson Land and MSAD Insurance 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 Henderson Land and MSAD Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Land Development and MSAD Insurance Group, you can compare the effects of market volatilities on Henderson Land and MSAD Insurance 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 Henderson Land with a short position of MSAD Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Land and MSAD Insurance.
Diversification Opportunities for Henderson Land and MSAD Insurance
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Henderson and MSAD is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Land Development and MSAD Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD Insurance Group and Henderson 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 Henderson Land Development are associated (or correlated) with MSAD Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD Insurance Group has no effect on the direction of Henderson Land i.e., Henderson Land and MSAD Insurance go up and down completely randomly.
Pair Corralation between Henderson Land and MSAD Insurance
Assuming the 90 days horizon Henderson Land Development is expected to generate 1.3 times more return on investment than MSAD Insurance. However, Henderson Land is 1.3 times more volatile than MSAD Insurance Group. It trades about 0.06 of its potential returns per unit of risk. MSAD Insurance Group is currently generating about 0.02 per unit of risk. If you would invest 294.00 in Henderson Land Development on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Henderson Land Development or generate 7.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Henderson Land Development vs. MSAD Insurance Group
Performance |
Timeline |
Henderson Land Devel |
MSAD Insurance Group |
Henderson Land and MSAD Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Henderson Land and MSAD Insurance
The main advantage of trading using opposite Henderson Land and MSAD Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Land position performs unexpectedly, MSAD Insurance 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 MSAD Insurance will offset losses from the drop in MSAD Insurance's long position.Henderson Land vs. Hang Lung Properties | Henderson Land vs. Sun Hung Kai | Henderson Land vs. Hong Kong and | Henderson Land vs. New World Development |
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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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