Correlation Between Fosun International and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Fosun International and CK Hutchison 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 Fosun International and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fosun International and CK Hutchison Holdings, you can compare the effects of market volatilities on Fosun International and CK Hutchison 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 Fosun International with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fosun International and CK Hutchison.
Diversification Opportunities for Fosun International and CK Hutchison
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fosun and CKHUF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fosun International and CK Hutchison Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Hutchison Holdings and Fosun International 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 Fosun International are associated (or correlated) with CK Hutchison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Hutchison Holdings has no effect on the direction of Fosun International i.e., Fosun International and CK Hutchison go up and down completely randomly.
Pair Corralation between Fosun International and CK Hutchison
Assuming the 90 days horizon Fosun International is expected to under-perform the CK Hutchison. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fosun International is 9.31 times less risky than CK Hutchison. The pink sheet trades about 0.0 of its potential returns per unit of risk. The CK Hutchison Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 205.00 in CK Hutchison Holdings on September 3, 2024 and sell it today you would earn a total of 305.00 from holding CK Hutchison Holdings or generate 148.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.25% |
| Values | Daily Returns |
Fosun International vs. CK Hutchison Holdings
Performance |
| Timeline |
| Fosun International |
| CK Hutchison Holdings |
Fosun International and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fosun International and CK Hutchison
The main advantage of trading using opposite Fosun International and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fosun International position performs unexpectedly, CK Hutchison 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 CK Hutchison will offset losses from the drop in CK Hutchison's long position.| Fosun International vs. Grupo Bimbo SAB | Fosun International vs. Grupo Financiero Inbursa | Fosun International vs. Becle SA de | Fosun International vs. HUMANA INC |
| CK Hutchison vs. Grupo Bimbo SAB | CK Hutchison vs. Grupo Financiero Inbursa | CK Hutchison vs. Becle SA de | CK Hutchison vs. HUMANA INC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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