Correlation Between CK Hutchison and Seaboard
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Seaboard 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 Seaboard 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 Seaboard, you can compare the effects of market volatilities on CK Hutchison and Seaboard 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 Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Seaboard.
Diversification Opportunities for CK Hutchison and Seaboard
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2CK and Seaboard is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard 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 Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of CK Hutchison i.e., CK Hutchison and Seaboard go up and down completely randomly.
Pair Corralation between CK Hutchison and Seaboard
Assuming the 90 days horizon CK Hutchison Holdings is expected to generate 2.78 times more return on investment than Seaboard. However, CK Hutchison is 2.78 times more volatile than Seaboard. It trades about 0.07 of its potential returns per unit of risk. Seaboard is currently generating about -0.05 per unit of risk. If you would invest 170.00 in CK Hutchison Holdings on November 7, 2024 and sell it today you would earn a total of 314.00 from holding CK Hutchison Holdings or generate 184.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Seaboard
Performance |
| Timeline |
| CK Hutchison Holdings |
| Seaboard |
CK Hutchison and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Seaboard
The main advantage of trading using opposite CK Hutchison and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| CK Hutchison vs. Haier Smart Home | CK Hutchison vs. CAIRN HOMES EO | CK Hutchison vs. Aedas Homes SA | CK Hutchison vs. Neinor Homes SA |
| Seaboard vs. ELL ENVIRONHLDGS HD 0001 | Seaboard vs. Daido Steel Co | Seaboard vs. Khiron Life Sciences | Seaboard vs. STMicroelectronics NV |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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