Correlation Between Longfor Properties and Guoco Group
Can any of the company-specific risk be diversified away by investing in both Longfor Properties and Guoco Group 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 Properties and Guoco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longfor Properties Co and Guoco Group Limited, you can compare the effects of market volatilities on Longfor Properties and Guoco Group 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 Properties with a short position of Guoco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Properties and Guoco Group.
Diversification Opportunities for Longfor Properties and Guoco Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longfor and Guoco is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Properties Co and Guoco Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guoco Group Limited and Longfor Properties 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 Properties Co are associated (or correlated) with Guoco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guoco Group Limited has no effect on the direction of Longfor Properties i.e., Longfor Properties and Guoco Group go up and down completely randomly.
Pair Corralation between Longfor Properties and Guoco Group
If you would invest 1,135 in Guoco Group Limited on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Guoco Group Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longfor Properties Co vs. Guoco Group Limited
Performance |
| Timeline |
| Longfor Properties |
| Guoco Group Limited |
Longfor Properties and Guoco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Properties and Guoco Group
The main advantage of trading using opposite Longfor Properties and Guoco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Properties position performs unexpectedly, Guoco Group 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 Guoco Group will offset losses from the drop in Guoco Group's long position.The idea behind Longfor Properties Co and Guoco Group Limited 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.| Guoco Group vs. AAC Clyde Space | Guoco Group vs. Avante Logixx | Guoco Group vs. Corby Spirit and | Guoco Group 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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