Correlation Between International Land and Sun Hung

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

By analyzing existing cross correlation between International Land Alliance and Sun Hung Kai, you can compare the effects of market volatilities on International Land and Sun Hung 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 International Land with a short position of Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Land and Sun Hung.

Diversification Opportunities for International Land and Sun Hung

-0.44

Correlation Coefficient

International Land  Sun Hung

Very good diversification

The 3 months correlation between International and Sun is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding International Land Alliance and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai and International 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 International Land Alliance are associated (or correlated) with Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of International Land i.e., International Land and Sun Hung go up and down completely randomly.

Pair Corralation between International Land and Sun Hung

Given the investment horizon of 90 days International Land Alliance is expected to generate 9.24 times more return on investment than Sun Hung. However, International Land is 9.24 times more volatile than Sun Hung Kai. It trades about 0.07 of its potential returns per unit of risk. Sun Hung Kai is currently generating about 0.0 per unit of risk. If you would invest  8.50  in International Land Alliance on October 7, 2024 and sell it today you would earn a total of  3.50  from holding International Land Alliance or generate 41.18% return on investment over 90 days.

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

International Land Alliance  vs.  Sun Hung Kai

International Land

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Land Alliance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, International Land disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sun Hung Kai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Hung Kai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with International Land and Sun Hung

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

The idea behind International Land Alliance and Sun Hung Kai 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..