Correlation Between Zillow Group and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Zillow Group 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 Zillow Group and Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and Hang Lung Group, you can compare the effects of market volatilities on Zillow Group 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 Zillow Group with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and Hang Lung.
Diversification Opportunities for Zillow Group and Hang Lung
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zillow and Hang is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class 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 Zillow 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 Zillow Group Class 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 Zillow Group i.e., Zillow Group and Hang Lung go up and down completely randomly.
Pair Corralation between Zillow Group and Hang Lung
Taking into account the 90-day investment horizon Zillow Group Class is expected to under-perform the Hang Lung. In addition to that, Zillow Group is 2.11 times more volatile than Hang Lung Group. It trades about -0.14 of its total potential returns per unit of risk. Hang Lung Group is currently generating about -0.12 per unit of volatility. If you would invest 665.00 in Hang Lung Group on January 20, 2024 and sell it today you would lose (66.00) from holding Hang Lung Group or give up 9.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Zillow Group Class vs. Hang Lung Group
Performance |
| Timeline |
| Zillow Group Class |
| Hang Lung Group |
Zillow Group and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and Hang Lung
The main advantage of trading using opposite Zillow Group and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group 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.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| Hang Lung vs. Comstock Holding Companies | Hang Lung vs. St Joe Company | Hang Lung vs. Stratus Properties | Hang Lung vs. HUMANA INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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