Correlation Between SM Prime and Hang Lung

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

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

Diversification Opportunities for SM Prime and Hang Lung

0.0

Correlation Coefficient

SM Prime  Hang Lung

Pay attention - limited upside

The 3 months correlation between SPHXF and Hang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Prime Holdings and Hang Lung Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Group and SM Prime 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 SM Prime Holdings 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 Group has no effect on the direction of SM Prime i.e., SM Prime and Hang Lung go up and down completely randomly.

Pair Corralation between SM Prime and Hang Lung

If you would invest  110.00  in Hang Lung Group on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Hang Lung Group or generate 0.0% return on investment over 90 days.

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

SM Prime Holdings  vs.  Hang Lung Group

SM Prime Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hang Lung Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SM Prime and Hang Lung

The main advantage of trading using opposite SM Prime and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Prime 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 SM Prime Holdings and Hang Lung Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.