Correlation Between Daito Trust and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Daito Trust 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 Daito Trust and Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daito Trust Construction and Hang Lung Group, you can compare the effects of market volatilities on Daito Trust 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 Daito Trust with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daito Trust and Hang Lung.
Diversification Opportunities for Daito Trust and Hang Lung
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daito and Hang is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Daito Trust Construction 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 Daito Trust 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 Daito Trust Construction 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 Daito Trust i.e., Daito Trust and Hang Lung go up and down completely randomly.
Pair Corralation between Daito Trust and Hang Lung
Assuming the 90 days horizon Daito Trust Construction is expected to generate 1.05 times more return on investment than Hang Lung. However, Daito Trust is 1.05 times more volatile than Hang Lung Group. It trades about 0.03 of its potential returns per unit of risk. Hang Lung Group is currently generating about -0.02 per unit of risk. If you would invest 2,267 in Daito Trust Construction on January 20, 2024 and sell it today you would earn a total of 419.00 from holding Daito Trust Construction or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.22% |
| Values | Daily Returns |
Daito Trust Construction vs. Hang Lung Group
Performance |
| Timeline |
| Daito Trust Construction |
| Hang Lung Group |
Daito Trust and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daito Trust and Hang Lung
The main advantage of trading using opposite Daito Trust and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daito Trust 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.| Daito Trust vs. Comstock Holding Companies | Daito Trust vs. St Joe Company | Daito Trust vs. Stratus Properties | Daito Trust vs. HUMANA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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