Correlation Between Hutchison Port and BW LPG
Can any of the company-specific risk be diversified away by investing in both Hutchison Port and BW LPG 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 Hutchison Port and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Port Holdings and BW LPG Limited, you can compare the effects of market volatilities on Hutchison Port and BW LPG 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 Hutchison Port with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Port and BW LPG.
Diversification Opportunities for Hutchison Port and BW LPG
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hutchison and BWLLF is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Port Holdings and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited and Hutchison Port 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 Hutchison Port Holdings are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Hutchison Port i.e., Hutchison Port and BW LPG go up and down completely randomly.
Pair Corralation between Hutchison Port and BW LPG
If you would invest 282.00 in Hutchison Port Holdings on August 31, 2024 and sell it today you would earn a total of 63.00 from holding Hutchison Port Holdings or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Hutchison Port Holdings vs. BW LPG Limited
Performance |
| Timeline |
| Hutchison Port Holdings |
| BW LPG Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hutchison Port and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Port and BW LPG
The main advantage of trading using opposite Hutchison Port and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Port position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| Hutchison Port vs. Kawasaki Kisen Kaisha | Hutchison Port vs. MPC Container Ships | Hutchison Port vs. Hapag Lloyd Aktiengesellschaft | Hutchison Port vs. Mitsui OSK Lines |
| BW LPG vs. Hutchison Port Holdings | BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. MPC Container Ships | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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