Correlation Between Honeywell International and CK HUTCHISON
Can any of the company-specific risk be diversified away by investing in both Honeywell International and CK HUTCHISON 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 Honeywell International and CK HUTCHISON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and CK HUTCHISON HLDGS, you can compare the effects of market volatilities on Honeywell International and CK HUTCHISON 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 Honeywell International with a short position of CK HUTCHISON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and CK HUTCHISON.
Diversification Opportunities for Honeywell International and CK HUTCHISON
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Honeywell and 2CKA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and CK HUTCHISON HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK HUTCHISON HLDGS and Honeywell International 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 Honeywell International are associated (or correlated) with CK HUTCHISON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK HUTCHISON HLDGS has no effect on the direction of Honeywell International i.e., Honeywell International and CK HUTCHISON go up and down completely randomly.
Pair Corralation between Honeywell International and CK HUTCHISON
Assuming the 90 days trading horizon Honeywell International is expected to generate 1.61 times more return on investment than CK HUTCHISON. However, Honeywell International is 1.61 times more volatile than CK HUTCHISON HLDGS. It trades about -0.05 of its potential returns per unit of risk. CK HUTCHISON HLDGS is currently generating about -0.39 per unit of risk. 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 |
Honeywell International vs. CK HUTCHISON HLDGS
Performance |
| Timeline |
| Honeywell International |
| CK HUTCHISON HLDGS |
Honeywell International and CK HUTCHISON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and CK HUTCHISON
The main advantage of trading using opposite Honeywell International and CK HUTCHISON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, CK HUTCHISON 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 CK HUTCHISON will offset losses from the drop in CK HUTCHISON's long position.| Honeywell International vs. NH HOTEL GROUP | Honeywell International vs. Australian Agricultural | Honeywell International vs. China Railway Construction | Honeywell International vs. CARSALESCOM |
| CK HUTCHISON vs. DENTSPLY SIRONA | CK HUTCHISON vs. FAST RETAIL ADR | CK HUTCHISON vs. COSTCO WHOLESALE CDR | CK HUTCHISON vs. Costco Wholesale Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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