Correlation Between Hang Lung and Immofinanz

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

By analyzing existing cross correlation between Hang Lung Group and Immofinanz AG, you can compare the effects of market volatilities on Hang Lung and Immofinanz 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 Hang Lung with a short position of Immofinanz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Lung and Immofinanz.

Diversification Opportunities for Hang Lung and Immofinanz

0.1

Correlation Coefficient

Hang Lung  Immofinanz

Average diversification

The 3 months correlation between Hang and Immofinanz is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hang Lung Group and Immofinanz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofinanz AG and Hang Lung 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 Hang Lung Group are associated (or correlated) with Immofinanz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofinanz AG has no effect on the direction of Hang Lung i.e., Hang Lung and Immofinanz go up and down completely randomly.

Pair Corralation between Hang Lung and Immofinanz

Assuming the 90 days horizon Hang Lung is expected to generate 2.33 times less return on investment than Immofinanz. In addition to that, Hang Lung is 1.21 times more volatile than Immofinanz AG. It trades about 0.04 of its total potential returns per unit of risk. Immofinanz AG is currently generating about 0.11 per unit of volatility. If you would invest  1,482  in Immofinanz AG on December 30, 2024 and sell it today you would earn a total of  178.00  from holding Immofinanz AG or generate 12.01% return on investment over 90 days.

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

Hang Lung Group  vs.  Immofinanz AG

Hang Lung Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hang Lung Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Hang Lung is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Immofinanz AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Immofinanz AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Immofinanz may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hang Lung and Immofinanz

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

The idea behind Hang Lung Group and Immofinanz AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.