Correlation Between Anywhere Real and Hang Lung

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

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

Diversification Opportunities for Anywhere Real and Hang Lung

-0.1

Correlation Coefficient

Anywhere Real  Hang Lung

Good diversification

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

Pair Corralation between Anywhere Real and Hang Lung

Given the investment horizon of 90 days Anywhere Real Estate is expected to generate 1.44 times more return on investment than Hang Lung. However, Anywhere Real is 1.44 times more volatile than Hang Lung Properties. It trades about 0.33 of its potential returns per unit of risk. Hang Lung Properties is currently generating about -0.02 per unit of risk. If you would invest  389.00  in Anywhere Real Estate on September 3, 2024 and sell it today you would earn a total of  101.00  from holding Anywhere Real Estate or generate 25.96% return on investment over 90 days.

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

Anywhere Real Estate  vs.  Hang Lung Properties

Anywhere Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anywhere Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Anywhere Real is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Hang Lung Properties

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hang Lung Properties are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hang Lung showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anywhere Real and Hang Lung

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

The idea behind Anywhere Real Estate and Hang Lung Properties 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.