Correlation Between CK Hutchison and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Jardine Matheson 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 Matheson 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 Matheson Holdings, you can compare the effects of market volatilities on CK Hutchison and Jardine Matheson 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 Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Jardine Matheson.
Diversification Opportunities for CK Hutchison and Jardine Matheson
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between CKHUY and Jardine is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings 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 Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of CK Hutchison i.e., CK Hutchison and Jardine Matheson go up and down completely randomly.
Pair Corralation between CK Hutchison and Jardine Matheson
Assuming the 90 days horizon CK Hutchison is expected to generate 1.45 times less return on investment than Jardine Matheson. But when comparing it to its historical volatility, CK Hutchison Holdings is 1.42 times less risky than Jardine Matheson. It trades about 0.04 of its potential returns per unit of risk. Jardine Matheson Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,750 in Jardine Matheson Holdings on September 1, 2024 and sell it today you would earn a total of 364.00 from holding Jardine Matheson Holdings or generate 9.71% 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 Matheson Holdings
Performance |
| Timeline |
| CK Hutchison Holdings |
| Jardine Matheson Holdings |
CK Hutchison and Jardine Matheson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Jardine Matheson
The main advantage of trading using opposite CK Hutchison and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Jardine Matheson 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 Matheson will offset losses from the drop in Jardine Matheson's long position.| CK Hutchison vs. Swire Pacific | CK Hutchison vs. Marubeni | CK Hutchison vs. Sumitomo Corp ADR | CK Hutchison vs. Marubeni Corp ADR |
| Jardine Matheson vs. 3M Company | Jardine Matheson vs. CK Hutchison Holdings | Jardine Matheson vs. Swire Pacific Ltd | Jardine Matheson vs. Teijin |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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