Correlation Between CK HUTCHISON and GigaMedia
Can any of the company-specific risk be diversified away by investing in both CK HUTCHISON and GigaMedia 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 GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK HUTCHISON HLDGS and GigaMedia, you can compare the effects of market volatilities on CK HUTCHISON and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK HUTCHISON and GigaMedia.
Diversification Opportunities for CK HUTCHISON and GigaMedia
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2CKA and GigaMedia is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CK HUTCHISON HLDGS and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 HLDGS are associated (or correlated) with GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of CK HUTCHISON i.e., CK HUTCHISON and GigaMedia go up and down completely randomly.
Pair Corralation between CK HUTCHISON and GigaMedia
Assuming the 90 days trading horizon CK HUTCHISON HLDGS is expected to generate 1.54 times more return on investment than GigaMedia. However, CK HUTCHISON is 1.54 times more volatile than GigaMedia. It trades about 0.03 of its potential returns per unit of risk. GigaMedia is currently generating about 0.02 per unit of risk. If you would invest 418.00 in CK HUTCHISON HLDGS on September 5, 2024 and sell it today you would earn a total of 58.00 from holding CK HUTCHISON HLDGS or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK HUTCHISON HLDGS vs. GigaMedia
Performance |
| Timeline |
| CK HUTCHISON HLDGS |
| GigaMedia |
CK HUTCHISON and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK HUTCHISON and GigaMedia
The main advantage of trading using opposite CK HUTCHISON and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK HUTCHISON position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| CK HUTCHISON vs. Genco Shipping Trading | CK HUTCHISON vs. REINET INVESTMENTS SCA | CK HUTCHISON vs. WisdomTree Investments | CK HUTCHISON vs. WIMFARM SA EO |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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