Correlation Between CK HUTCHISON and HK Electric
Can any of the company-specific risk be diversified away by investing in both CK HUTCHISON and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on CK HUTCHISON and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK HUTCHISON and HK Electric.
Diversification Opportunities for CK HUTCHISON and HK Electric
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2CKA and HKT is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CK HUTCHISON HLDGS and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of CK HUTCHISON i.e., CK HUTCHISON and HK Electric go up and down completely randomly.
Pair Corralation between CK HUTCHISON and HK Electric
Assuming the 90 days trading horizon CK HUTCHISON HLDGS is expected to generate 1.59 times more return on investment than HK Electric. However, CK HUTCHISON is 1.59 times more volatile than HK Electric Investments. It trades about 0.18 of its potential returns per unit of risk. HK Electric Investments is currently generating about 0.1 per unit of risk. If you would invest 454.00 in CK HUTCHISON HLDGS on September 5, 2024 and sell it today you would earn a total of 22.00 from holding CK HUTCHISON HLDGS or generate 4.85% 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. HK Electric Investments
Performance |
| Timeline |
| CK HUTCHISON HLDGS |
| HK Electric Investments |
CK HUTCHISON and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK HUTCHISON and HK Electric
The main advantage of trading using opposite CK HUTCHISON and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK HUTCHISON position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric'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 |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| 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 | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |