Correlation Between Henderson Land and SYN Prop

Can any of the company-specific risk be diversified away by investing in both Henderson Land and SYN Prop 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 SYN Prop 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 SYN prop e, you can compare the effects of market volatilities on Henderson Land and SYN Prop 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 SYN Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Land and SYN Prop.

Diversification Opportunities for Henderson Land and SYN Prop

-0.66

Correlation Coefficient

Henderson Land  SYN Prop

Excellent diversification

The 3 months correlation between Henderson and SYN is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Land Development and SYN prop e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN prop e 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 SYN Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN prop e has no effect on the direction of Henderson Land i.e., Henderson Land and SYN Prop go up and down completely randomly.

Pair Corralation between Henderson Land and SYN Prop

Assuming the 90 days horizon Henderson Land is expected to generate 36.78 times less return on investment than SYN Prop. But when comparing it to its historical volatility, Henderson Land Development is 2.6 times less risky than SYN Prop. It trades about 0.01 of its potential returns per unit of risk. SYN prop e is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  112.00  in SYN prop e on September 30, 2024 and sell it today you would earn a total of  414.00  from holding SYN prop e or generate 369.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Henderson Land Development  vs.  SYN prop e

Henderson Land Devel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Henderson Land Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Henderson Land is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SYN prop e

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SYN prop e are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SYN Prop showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Henderson Land and SYN Prop

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

The idea behind Henderson Land Development and SYN prop e 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.