Correlation Between CK Hutchison and Shanghai Industrial
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Shanghai Industrial 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 Shanghai Industrial 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 Shanghai Industrial Holdings, you can compare the effects of market volatilities on CK Hutchison and Shanghai Industrial 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 Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Shanghai Industrial.
Diversification Opportunities for CK Hutchison and Shanghai Industrial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CKHUY and Shanghai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial 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 Shanghai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Industrial has no effect on the direction of CK Hutchison i.e., CK Hutchison and Shanghai Industrial go up and down completely randomly.
Pair Corralation between CK Hutchison and Shanghai Industrial
Assuming the 90 days horizon CK Hutchison is expected to generate 3.68 times less return on investment than Shanghai Industrial. But when comparing it to its historical volatility, CK Hutchison Holdings is 2.65 times less risky than Shanghai Industrial. It trades about 0.01 of its potential returns per unit of risk. Shanghai Industrial Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Shanghai Industrial Holdings on September 19, 2024 and sell it today you would lose (9.00) from holding Shanghai Industrial Holdings or give up 7.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.27% |
| Values | Daily Returns |
CK Hutchison Holdings vs. Shanghai Industrial Holdings
Performance |
| Timeline |
| CK Hutchison Holdings |
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CK Hutchison and Shanghai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Hutchison and Shanghai Industrial
The main advantage of trading using opposite CK Hutchison and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Shanghai Industrial 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 Shanghai Industrial will offset losses from the drop in Shanghai Industrial's long position.| CK Hutchison vs. HUMANA INC | CK Hutchison vs. Barloworld Ltd ADR | CK Hutchison vs. Morningstar Unconstrained Allocation | CK Hutchison vs. Thrivent High Yield |
| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |