Correlation Between Ayala and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Ayala 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 Ayala and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala and CK Hutchison Holdings, you can compare the effects of market volatilities on Ayala 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 Ayala with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala and CK Hutchison.
Diversification Opportunities for Ayala and CK Hutchison
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ayala and CKHUF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ayala and CK Hutchison Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Hutchison Holdings and Ayala 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 Ayala 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 Holdings has no effect on the direction of Ayala i.e., Ayala and CK Hutchison go up and down completely randomly.
Pair Corralation between Ayala and CK Hutchison
Assuming the 90 days horizon Ayala is expected to generate 0.56 times more return on investment than CK Hutchison. However, Ayala is 1.79 times less risky than CK Hutchison. It trades about 0.12 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,005 in Ayala on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Ayala or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Ayala vs. CK Hutchison Holdings
Performance |
| Timeline |
| Ayala |
| CK Hutchison Holdings |
Ayala and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala and CK Hutchison
The main advantage of trading using opposite Ayala and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala 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.| Ayala vs. Stagwell | Ayala vs. Uranium Energy Corp | Ayala vs. Village Super Market | Ayala vs. Hf Foods Group |
| CK Hutchison vs. Jardine Cycle Carriage | CK Hutchison vs. CK Hutchison Holdings | CK Hutchison vs. 3M Company | CK Hutchison vs. Swire Pacific Ltd |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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