Correlation Between Swire Properties and Sumitomo Realty
Can any of the company-specific risk be diversified away by investing in both Swire Properties and Sumitomo Realty 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 Swire Properties and Sumitomo Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Properties Limited and Sumitomo Realty Development, you can compare the effects of market volatilities on Swire Properties and Sumitomo Realty 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 Swire Properties with a short position of Sumitomo Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and Sumitomo Realty.
Diversification Opportunities for Swire Properties and Sumitomo Realty
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swire and Sumitomo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Swire Properties Limited and Sumitomo Realty Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Realty Deve and Swire 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 Swire Properties Limited are associated (or correlated) with Sumitomo Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Realty Deve has no effect on the direction of Swire Properties i.e., Swire Properties and Sumitomo Realty go up and down completely randomly.
Pair Corralation between Swire Properties and Sumitomo Realty
Assuming the 90 days horizon Swire Properties Limited is expected to generate 0.67 times more return on investment than Sumitomo Realty. However, Swire Properties Limited is 1.49 times less risky than Sumitomo Realty. It trades about 0.12 of its potential returns per unit of risk. Sumitomo Realty Development is currently generating about 0.04 per unit of risk. If you would invest 269.00 in Swire Properties Limited on August 21, 2025 and sell it today you would earn a total of 27.00 from holding Swire Properties Limited or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Swire Properties Limited vs. Sumitomo Realty Development
Performance |
| Timeline |
| Swire Properties |
| Sumitomo Realty Deve |
Swire Properties and Sumitomo Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Properties and Sumitomo Realty
The main advantage of trading using opposite Swire Properties and Sumitomo Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Properties position performs unexpectedly, Sumitomo Realty 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 Sumitomo Realty will offset losses from the drop in Sumitomo Realty's long position.| Swire Properties vs. Henderson Land | Swire Properties vs. Vantage Towers AG | Swire Properties vs. CK Asset Holdings | Swire Properties vs. Hong Kong Land |
| Sumitomo Realty vs. Daiwa House Industry | Sumitomo Realty vs. Daiwa House Industry | Sumitomo Realty vs. Vantage Towers AG | Sumitomo Realty vs. Cellnex Telecom SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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