Correlation Between Lai Sun and Morningstar Unconstrained

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

By analyzing existing cross correlation between Lai Sun Development and Morningstar Unconstrained Allocation, you can compare the effects of market volatilities on Lai Sun and Morningstar Unconstrained 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 Lai Sun with a short position of Morningstar Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lai Sun and Morningstar Unconstrained.

Diversification Opportunities for Lai Sun and Morningstar Unconstrained

0.0

Correlation Coefficient

Lai Sun  Morningstar Unconstrained

Pay attention - limited upside

The 3 months correlation between Lai and Morningstar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lai Sun Development and Morningstar Unconstrained Allo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Unconstrained and Lai Sun 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 Lai Sun Development are associated (or correlated) with Morningstar Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Unconstrained has no effect on the direction of Lai Sun i.e., Lai Sun and Morningstar Unconstrained go up and down completely randomly.

Pair Corralation between Lai Sun and Morningstar Unconstrained

If you would invest  1,051  in Morningstar Unconstrained Allocation on October 22, 2024 and sell it today you would earn a total of  6.00  from holding Morningstar Unconstrained Allocation or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Lai Sun Development  vs.  Morningstar Unconstrained Allo

Lai Sun Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lai Sun Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Lai Sun is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Morningstar Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morningstar Unconstrained Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Lai Sun and Morningstar Unconstrained

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

The idea behind Lai Sun Development and Morningstar Unconstrained Allocation 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.