Correlation between Prop n Stocks

[minority]

http://www.propwise.sg/predicting-th...y-price-index/


"While my company relies on several indicators to assess the Singapore property market, I often use the Ascendant Assets Indicator (AAI) to tell me how the overall market is performing. The basic premises of the AAI index are (1) a lead-lag relationship exists between the stock and property market and (2) we are able to tell how the economy is performing by analysing the correlation between the stock and property market.

To illustrate, let us look at Figure 1. The correlation between stocks and properties is observed to be high, i.e. when the AAI (the blue line) is more than 50% (represented by the dotted line). These phases of strong correlation occur when both stock and property prices are moving in tandem upwards (during bullish economic conditions) or downwards (during bearish economic conditions).

Phases of weak correlation (blue line below the dotted line) occur when stock prices diverge from property prices. This happens because stocks, which are more liquid, react faster to changing market conditions. As a result, yellow phases indicate that the economy is turning point.

Deciphering the market trends

If you were to look at Figure 2, you will notice that past yellow volatile zones (highlighted in red) coincided with the decline of the URA PPPI (pink line). Based on this recurring trend, I was able to tell that economic conditions were gradually becoming more uncertain and that a decline in the URA PPPI was just around the corner."



So looking at this we are in the next phase to be pink. Can only be down trend from here?

I guess the guy can be 50% right 50% wrong

[kane]

I would argue that we aren't in the volatile phase. Stock values are fairly high and the vix is still at a low. I would agree with the hypothesis if STI was at 2200 and HSI was at 17000

[roly8]

looking at the chart, property is at almost near the 75% level..

if there is a correction, it will probably hit the 50% level , at least.. And then bounce off to test the high again...

[Laguna]

I attended the pre-sale talk of this model and looked into the author of this model together with his publication, and his past property investment.

This is one of those trying to get big monies from conducting seminar.

Read the book first and form your opinion before using this model.

My conclusion, his model does not work.

[minority]

Away as long as the intention is to hold long term n entry are not at peak . More than 40% paid up don't think the model matters. On the to remeber is property are not like stocks can be so liquid. Ask the owners who are trying to sell lately how long their unit have been on market?

[minority]

I would argue that we aren't in the volatile phase. Stock values are fairly high and the vix is still at a low. I would agree with the hypothesis if STI was at 2200 and HSI was at 17000

Yeah. Just got to watch the equity market. The barometer of sentiment.

[jwong71]

Away as long as the intention is to hold long term n entry are not at peak . More than 40% paid up don't think the model matters. On the to remeber is property are not like stocks can be so liquid. Ask the owners who are trying to sell lately how long their unit have been on market?

i took 3 months to sell in year 2010.

now 2012, what do you think how many months?? Since asking prices are higher

[East Lover]

I attended the pre-sale talk of this model and looked into the author of this model together with his publication, and his past property investment.

This is one of those trying to get big monies from conducting seminar.

Read the book first and form your opinion before using this model.

My conclusion, his model does not work.

Dear Laguna,

Would you like to elaborate more on why do you think his model does not work? what do you view of the pink line? still has some room to up?

[Laguna]

Dear Laguna,

Would you like to elaborate more on why do you think his model does not work? what do you view of the pink line? still has some room to up?

Hi Friend
first u buy author's book first, and then u assess his capability from there. I can lend the book to u.

If the model can work, it shall also work in other property markets and not just Sg.

Next, property market is subject to govt intervention but not the equity market.

[amk]

I simply do not believe pty market can be "model'ed". It's even worse than modeling a credit market.

[focus]

From the chart above, you can see there is no co-relation at all.
Sometimes it goes up after the dip.. sometimes it goes down after the dip.

[minority]

I simply do not believe pty market can be "model'ed". It's even worse than modeling a credit market.

But we can't deny there is son correlation between equity n property. People make $ in equity they park in property. When loose $ either force to sell or don't buy. End up quieter

[kane]

i'll be very interested to review this chart by the end of this year.

[amk]

But we can't deny there is son correlation between equity n property. People make $ in equity they park in property. When loose $ either force to sell or don't buy. End up quieter

I'm with you that there is positive correlation between equity and pty esp in Asia context. The problem is the modeling, that can be quantitative. Without a quantitative basis, such correlation is only empirically observed, in other words can only see from hindsight, without enough confidence factor to predict. IMHO at best we could only gauge the trend from the positive correlation.

[blackjack21trader]

I'm with you that there is positive correlation between equity and pty esp in Asia context. The problem is the modeling, that can be quantitative. Without a quantitative basis, such correlation is only empirically observed, in other words can only see from hindsight, without enough confidence factor to predict. IMHO at best we could only gauge the trend from the positive correlation.

There is also a negative correlation between Adam Cheng and my stocks hor:

The Ting Hai effect , Adam Cheng effect or Chiu-Koon effect is a peculiar stock market phenomenon.[1] The phenomenon is observed that whenever Hong Kong actor Adam Cheng stars in a new television show, there is a sudden and unexplained drop in the stock market.[2] This is still a popular topic amongst stock brokers, years after the drama series Greed of Man was broadcast in Hong Kong in October 1992. The effect is named after Ting Hai (丁蟹), the main antagonist of the show, played by Cheng himself.

even angmo also know hor:

http://www.benkaiser.net/adam/


"The phenomenon is observed that whenever Hong Kong actor Adam Cheng stars in a new television show, there is a sudden and unexplained drop in the stock market."...WOAHAHAHAHHAHAHAHAH

[DKSG]

There is also a negative correlation between Adam Cheng and my stocks hor:



even angmo also know hor:

http://www.benkaiser.net/adam/


"The phenomenon is observed that whenever Hong Kong actor Adam Cheng stars in a new television show, there is a sudden and unexplained drop in the stock market."...WOAHAHAHAHHAHAHAHAH

Can someone post Mr Cheng's film broadcast schedule ppplleeeeeaaasseee!

[amk]

BJ21 u r such a funny guy

ok next 鄭少秋 show, 《心戰》, heard supposed to screen in May, very SOON

"sell in May" ?