Correlation Between Belpointe PREP and Sun Hung

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

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

Diversification Opportunities for Belpointe PREP and Sun Hung

0.77

Correlation Coefficient

Belpointe PREP  Sun Hung

Poor diversification

The 3 months correlation between Belpointe and Sun is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Belpointe PREP LLC 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 Belpointe PREP 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 Belpointe PREP LLC 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 Belpointe PREP i.e., Belpointe PREP and Sun Hung go up and down completely randomly.

Pair Corralation between Belpointe PREP and Sun Hung

Allowing for the 90-day total investment horizon Belpointe PREP is expected to generate 4.08 times less return on investment than Sun Hung. In addition to that, Belpointe PREP is 1.09 times more volatile than Sun Hung Kai. It trades about 0.03 of its total potential returns per unit of risk. Sun Hung Kai is currently generating about 0.15 per unit of volatility. If you would invest  893.00  in Sun Hung Kai on November 28, 2024 and sell it today you would earn a total of  36.00  from holding Sun Hung Kai or generate 4.03% return on investment over 90 days.

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

Belpointe PREP LLC  vs.  Sun Hung Kai

Belpointe PREP LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belpointe PREP LLC 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 basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sun Hung Kai

Risk-Adjusted Performance

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 latest weak performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Belpointe PREP and Sun Hung

The main advantage of trading using opposite Belpointe PREP and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belpointe PREP 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 Belpointe PREP LLC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.