Correlation Between CK Hutchison and Honeywell International
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Honeywell International 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 Honeywell International 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 Honeywell International, you can compare the effects of market volatilities on CK Hutchison and Honeywell International 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 Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Honeywell International.
Diversification Opportunities for CK Hutchison and Honeywell International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKHUF and Honeywell is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International 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 Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of CK Hutchison i.e., CK Hutchison and Honeywell International go up and down completely randomly.
Pair Corralation between CK Hutchison and Honeywell International
Assuming the 90 days horizon CK Hutchison Holdings is expected to generate 40.66 times more return on investment than Honeywell International. However, CK Hutchison is 40.66 times more volatile than Honeywell International. It trades about 0.15 of its potential returns per unit of risk. Honeywell International is currently generating about 0.03 per unit of risk. If you would invest 577.00 in CK Hutchison Holdings on September 1, 2024 and sell it today you would lose (67.00) from holding CK Hutchison Holdings or give up 11.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.09% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Honeywell International
Performance |
| Timeline |
| CK Hutchison Holdings |
| Honeywell International |
CK Hutchison and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Honeywell International
The main advantage of trading using opposite CK Hutchison and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |