Correlation Between CK Hutchison and Honeywell International
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Honeywell International 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 CK Hutchison and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Hutchison Holdings and Honeywell International, you can compare the effects of market volatilities on CK Hutchison and Honeywell International 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 CK Hutchison with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Honeywell International.
Diversification Opportunities for CK Hutchison and Honeywell International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 2CK and Honeywell is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and CK Hutchison 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 CK Hutchison Holdings are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of CK Hutchison i.e., CK Hutchison and Honeywell International go up and down completely randomly.
Pair Corralation between CK Hutchison and Honeywell International
Assuming the 90 days horizon CK Hutchison Holdings is expected to under-perform the Honeywell International. But the stock apears to be less risky and, when comparing its historical volatility, CK Hutchison Holdings is 1.18 times less risky than Honeywell International. The stock trades about -0.24 of its potential returns per unit of risk. The Honeywell International is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 22,020 in Honeywell International on November 4, 2024 and sell it today you would lose (320.00) from holding Honeywell International or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Honeywell International
Performance |
| Timeline |
| CK Hutchison Holdings |
| Honeywell International |
CK Hutchison and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Honeywell International
The main advantage of trading using opposite CK Hutchison and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| CK Hutchison vs. Hyatt Hotels | CK Hutchison vs. BRAEMAR HOTELS RES | CK Hutchison vs. BII Railway Transportation | CK Hutchison vs. Dalata Hotel Group |
| Honeywell International vs. NH HOTEL GROUP | Honeywell International vs. Australian Agricultural | Honeywell International vs. China Railway Construction | Honeywell International vs. CARSALESCOM |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |