Correlation Between Resilient Property and Hulamin

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

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

Diversification Opportunities for Resilient Property and Hulamin

-0.57

Correlation Coefficient

Resilient Property  Hulamin

Excellent diversification

The 3 months correlation between Resilient and Hulamin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Resilient Property Income and Hulamin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hulamin and Resilient Property 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 Resilient Property Income are associated (or correlated) with Hulamin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hulamin has no effect on the direction of Resilient Property i.e., Resilient Property and Hulamin go up and down completely randomly.

Pair Corralation between Resilient Property and Hulamin

Assuming the 90 days trading horizon Resilient Property Income is expected to generate 0.57 times more return on investment than Hulamin. However, Resilient Property Income is 1.75 times less risky than Hulamin. It trades about 0.07 of its potential returns per unit of risk. Hulamin is currently generating about 0.03 per unit of risk. If you would invest  413,900  in Resilient Property Income on September 14, 2024 and sell it today you would earn a total of  191,100  from holding Resilient Property Income or generate 46.17% return on investment over 90 days.

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

Resilient Property Income  vs.  Hulamin

Resilient Property Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Resilient Property Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Resilient Property is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hulamin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hulamin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Resilient Property and Hulamin

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

The idea behind Resilient Property Income and Hulamin 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.