Correlation Between SPCG Public and Quality Houses

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

By analyzing existing cross correlation between SPCG Public and Quality Houses Property, you can compare the effects of market volatilities on SPCG Public and Quality Houses 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 SPCG Public with a short position of Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPCG Public and Quality Houses.

Diversification Opportunities for SPCG Public and Quality Houses

-0.31

Correlation Coefficient

SPCG Public  Quality Houses

Very good diversification

The 3 months correlation between SPCG and Quality is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPCG Public and Quality Houses Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Property and SPCG Public 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 SPCG Public are associated (or correlated) with Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Property has no effect on the direction of SPCG Public i.e., SPCG Public and Quality Houses go up and down completely randomly.

Pair Corralation between SPCG Public and Quality Houses

Assuming the 90 days trading horizon SPCG Public is expected to generate 0.09 times more return on investment than Quality Houses. However, SPCG Public is 10.66 times less risky than Quality Houses. It trades about -0.02 of its potential returns per unit of risk. Quality Houses Property is currently generating about -0.15 per unit of risk. If you would invest  776.00  in SPCG Public on December 30, 2024 and sell it today you would lose (16.00) from holding SPCG Public or give up 2.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SPCG Public  vs.  Quality Houses Property

SPCG Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPCG Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, SPCG Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Quality Houses Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quality Houses Property has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the fund institutional investors.

Pair Trading with SPCG Public and Quality Houses

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

The idea behind SPCG Public and Quality Houses Property 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 Anywhere module to track or share privately all of your investments from the convenience of any device.