Correlation Between Corporacin Inmobiliaria and Sun Hung

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

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

Diversification Opportunities for Corporacin Inmobiliaria and Sun Hung

0.43

Correlation Coefficient

Corporacin Inmobiliaria  Sun Hung

Very weak diversification

The 3 months correlation between Corporacin and Sun is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Corporacin Inmobiliaria Vesta, 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 Corporacin Inmobiliaria 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 Corporacin Inmobiliaria Vesta, 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 Corporacin Inmobiliaria i.e., Corporacin Inmobiliaria and Sun Hung go up and down completely randomly.

Pair Corralation between Corporacin Inmobiliaria and Sun Hung

Given the investment horizon of 90 days Corporacin Inmobiliaria Vesta, is expected to under-perform the Sun Hung. In addition to that, Corporacin Inmobiliaria is 1.24 times more volatile than Sun Hung Kai. It trades about -0.07 of its total potential returns per unit of risk. Sun Hung Kai is currently generating about 0.0 per unit of volatility. If you would invest  976.00  in Sun Hung Kai on October 7, 2024 and sell it today you would lose (27.00) from holding Sun Hung Kai or give up 2.77% of portfolio value over 90 days.

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

Corporacin Inmobiliaria Vesta,  vs.  Sun Hung Kai

Corporacin Inmobiliaria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corporacin Inmobiliaria Vesta, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Corporacin Inmobiliaria is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sun Hung Kai

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's forward-looking indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Corporacin Inmobiliaria and Sun Hung

The main advantage of trading using opposite Corporacin Inmobiliaria and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacin Inmobiliaria 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 Corporacin Inmobiliaria Vesta, 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.