Correlation Between Longfor Group and Sino Land
Can any of the company-specific risk be diversified away by investing in both Longfor Group and Sino Land 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 Longfor Group and Sino Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longfor Group Holdings and Sino Land, you can compare the effects of market volatilities on Longfor Group and Sino Land 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 Longfor Group with a short position of Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Group and Sino Land.
Diversification Opportunities for Longfor Group and Sino Land
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Longfor and Sino is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Group Holdings and Sino Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land and Longfor Group 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 Longfor Group Holdings are associated (or correlated) with Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Longfor Group i.e., Longfor Group and Sino Land go up and down completely randomly.
Pair Corralation between Longfor Group and Sino Land
Assuming the 90 days horizon Longfor Group is expected to generate 1.8 times less return on investment than Sino Land. In addition to that, Longfor Group is 1.13 times more volatile than Sino Land. It trades about 0.07 of its total potential returns per unit of risk. Sino Land is currently generating about 0.14 per unit of volatility. If you would invest 54.00 in Sino Land on September 24, 2024 and sell it today you would earn a total of 39.00 from holding Sino Land or generate 72.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Longfor Group Holdings vs. Sino Land
Performance |
Timeline |
Longfor Group Holdings |
Sino Land |
Longfor Group and Sino Land Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Longfor Group and Sino Land
The main advantage of trading using opposite Longfor Group and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Group position performs unexpectedly, Sino Land 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 Sino Land will offset losses from the drop in Sino Land's long position.Longfor Group vs. Sun Hung Kai | Longfor Group vs. China Overseas Land | Longfor Group vs. Mitsui Fudosan Co | Longfor Group vs. Mitsubishi Estate Co |
Sino Land vs. Sun Hung Kai | Sino Land vs. China Overseas Land | Sino Land vs. Longfor Group Holdings | Sino Land vs. Mitsui Fudosan Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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