Correlation Between CK Hutchison and Valmont Industries
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Valmont Industries 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 Valmont Industries 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 Valmont Industries, you can compare the effects of market volatilities on CK Hutchison and Valmont Industries 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 Valmont Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Valmont Industries.
Diversification Opportunities for CK Hutchison and Valmont Industries
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKHUF and Valmont is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Valmont Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmont Industries 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 Valmont Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valmont Industries has no effect on the direction of CK Hutchison i.e., CK Hutchison and Valmont Industries go up and down completely randomly.
Pair Corralation between CK Hutchison and Valmont Industries
Assuming the 90 days horizon CK Hutchison Holdings is expected to generate 22.15 times more return on investment than Valmont Industries. However, CK Hutchison is 22.15 times more volatile than Valmont Industries. It trades about 0.15 of its potential returns per unit of risk. Valmont Industries is currently generating about 0.02 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 | Insignificant |
| Accuracy | 89.09% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Valmont Industries
Performance |
| Timeline |
| CK Hutchison Holdings |
| Valmont Industries |
CK Hutchison and Valmont Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Valmont Industries
The main advantage of trading using opposite CK Hutchison and Valmont Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Valmont Industries 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 Valmont Industries will offset losses from the drop in Valmont Industries' 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 |
| Valmont Industries vs. Canadian Solar | Valmont Industries vs. Maxeon Solar Technologies | Valmont Industries vs. SolarEdge Technologies | Valmont Industries vs. Sunnova Energy 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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