Correlation Between CK Hutchison and Jardine Cycle
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Jardine Cycle 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 Jardine Cycle 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 Jardine Cycle Carriage, you can compare the effects of market volatilities on CK Hutchison and Jardine Cycle 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 Jardine Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Jardine Cycle.
Diversification Opportunities for CK Hutchison and Jardine Cycle
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKHUF and Jardine is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Jardine Cycle Carriage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Cycle Carriage 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 Jardine Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Cycle Carriage has no effect on the direction of CK Hutchison i.e., CK Hutchison and Jardine Cycle go up and down completely randomly.
Pair Corralation between CK Hutchison and Jardine Cycle
Assuming the 90 days horizon CK Hutchison Holdings is expected to generate 1.21 times more return on investment than Jardine Cycle. However, CK Hutchison is 1.21 times more volatile than Jardine Cycle Carriage. It trades about 0.02 of its potential returns per unit of risk. Jardine Cycle Carriage is currently generating about 0.02 per unit of risk. If you would invest 482.00 in CK Hutchison Holdings on August 26, 2024 and sell it today you would earn a total of 13.00 from holding CK Hutchison Holdings or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Jardine Cycle Carriage
Performance |
| Timeline |
| CK Hutchison Holdings |
| Jardine Cycle Carriage |
CK Hutchison and Jardine Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Jardine Cycle
The main advantage of trading using opposite CK Hutchison and Jardine Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Jardine Cycle 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 Jardine Cycle will offset losses from the drop in Jardine Cycle'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 |
| Jardine Cycle vs. CK Hutchison Holdings | Jardine Cycle vs. CK Hutchison Holdings | Jardine Cycle vs. 3M Company | Jardine Cycle vs. Honeywell International |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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