Correlation Between CK Hutchison and MDU Resources
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and MDU Resources 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 MDU Resources 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 MDU Resources Group, you can compare the effects of market volatilities on CK Hutchison and MDU Resources 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 MDU Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and MDU Resources.
Diversification Opportunities for CK Hutchison and MDU Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKHUF and MDU is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and MDU Resources Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDU Resources Group 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 MDU Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDU Resources Group has no effect on the direction of CK Hutchison i.e., CK Hutchison and MDU Resources go up and down completely randomly.
Pair Corralation between CK Hutchison and MDU Resources
Assuming the 90 days horizon CK Hutchison is expected to generate 3.81 times less return on investment than MDU Resources. In addition to that, CK Hutchison is 1.57 times more volatile than MDU Resources Group. It trades about 0.03 of its total potential returns per unit of risk. MDU Resources Group is currently generating about 0.19 per unit of volatility. If you would invest 1,330 in MDU Resources Group on September 3, 2024 and sell it today you would earn a total of 674.00 from holding MDU Resources Group or generate 50.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
CK Hutchison Holdings vs. MDU Resources Group
Performance |
| Timeline |
| CK Hutchison Holdings |
| MDU Resources Group |
CK Hutchison and MDU Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and MDU Resources
The main advantage of trading using opposite CK Hutchison and MDU Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, MDU Resources 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 MDU Resources will offset losses from the drop in MDU Resources' long position.| CK Hutchison vs. Grupo Bimbo SAB | CK Hutchison vs. Grupo Financiero Inbursa | CK Hutchison vs. Becle SA de | CK Hutchison vs. HUMANA INC |
| MDU Resources vs. Griffon | MDU Resources vs. Brookfield Business Partners | MDU Resources vs. Matthews International | MDU Resources vs. Steel Partners Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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