Correlation Between Swire Properties and MYFAIR GOLD

Can any of the company-specific risk be diversified away by investing in both Swire Properties and MYFAIR GOLD 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 Swire Properties and MYFAIR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Swire Properties Limited and MYFAIR GOLD P, you can compare the effects of market volatilities on Swire Properties and MYFAIR GOLD 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 Swire Properties with a short position of MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and MYFAIR GOLD.

Diversification Opportunities for Swire Properties and MYFAIR GOLD

-0.03

Correlation Coefficient

Swire Properties  MYFAIR GOLD

Good diversification

The 3 months correlation between Swire and MYFAIR is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Swire Properties Limited and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P and Swire Properties 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 Swire Properties Limited are associated (or correlated) with MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of Swire Properties i.e., Swire Properties and MYFAIR GOLD go up and down completely randomly.

Pair Corralation between Swire Properties and MYFAIR GOLD

Assuming the 90 days horizon Swire Properties Limited is expected to generate 1.41 times more return on investment than MYFAIR GOLD. However, Swire Properties is 1.41 times more volatile than MYFAIR GOLD P. It trades about 0.07 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about 0.03 per unit of risk. If you would invest  66.00  in Swire Properties Limited on September 24, 2024 and sell it today you would earn a total of  122.00  from holding Swire Properties Limited or generate 184.85% return on investment over 90 days.

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

Swire Properties Limited  vs.  MYFAIR GOLD P

Swire Properties

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Swire Properties Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Swire Properties reported solid returns over the last few months and may actually be approaching a breakup point.

MYFAIR GOLD P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Swire Properties and MYFAIR GOLD

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

The idea behind Swire Properties Limited and MYFAIR GOLD P 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.