Correlation Between Hongkong Land and SHIP HEALTHCARE

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

By analyzing existing cross correlation between Hongkong Land Holdings and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Hongkong Land and SHIP HEALTHCARE 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 Hongkong Land with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongkong Land and SHIP HEALTHCARE.

Diversification Opportunities for Hongkong Land and SHIP HEALTHCARE

-0.65

Correlation Coefficient

Hongkong Land  SHIP HEALTHCARE

Excellent diversification

The 3 months correlation between Hongkong and SHIP is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hongkong Land Holdings and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Hongkong 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 Hongkong Land Holdings are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Hongkong Land i.e., Hongkong Land and SHIP HEALTHCARE go up and down completely randomly.

Pair Corralation between Hongkong Land and SHIP HEALTHCARE

Assuming the 90 days horizon Hongkong Land is expected to generate 1.73 times less return on investment than SHIP HEALTHCARE. But when comparing it to its historical volatility, Hongkong Land Holdings is 1.4 times less risky than SHIP HEALTHCARE. It trades about 0.02 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,142  in SHIP HEALTHCARE HLDGINC on September 29, 2024 and sell it today you would earn a total of  188.00  from holding SHIP HEALTHCARE HLDGINC or generate 16.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Hongkong Land Holdings  vs.  SHIP HEALTHCARE HLDGINC

Hongkong Land Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hongkong Land Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hongkong Land reported solid returns over the last few months and may actually be approaching a breakup point.

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hongkong Land and SHIP HEALTHCARE

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

The idea behind Hongkong Land Holdings and SHIP HEALTHCARE HLDGINC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..