Correlation Between Total Produce and Hang Lung

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

By analyzing existing cross correlation between Total Produce Plc and Hang Lung Properties, you can compare the effects of market volatilities on Total Produce 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 Total Produce with a short position of Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Produce and Hang Lung.

Diversification Opportunities for Total Produce and Hang Lung

0.0

Correlation Coefficient

Total Produce  Hang Lung

Pay attention - limited upside

The 3 months correlation between Total and Hang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Total Produce Plc and Hang Lung Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Properties and Total Produce 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 Total Produce Plc 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 Properties has no effect on the direction of Total Produce i.e., Total Produce and Hang Lung go up and down completely randomly.

Pair Corralation between Total Produce and Hang Lung

If you would invest  516.00  in Hang Lung Properties on January 26, 2024 and sell it today you would earn a total of  28.00  from holding Hang Lung Properties or generate 5.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Total Produce Plc  vs.  Hang Lung Properties

Total Produce Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Produce Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Total Produce is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Hang Lung Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hang Lung Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Total Produce and Hang Lung

The main advantage of trading using opposite Total Produce and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Produce 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.

The idea behind Total Produce Plc and Hang Lung Properties 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.