Correlation Between ITOCHU and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both ITOCHU 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 ITOCHU and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITOCHU and CK Hutchison Holdings, you can compare the effects of market volatilities on ITOCHU 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 ITOCHU with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITOCHU and CK Hutchison.
Diversification Opportunities for ITOCHU and CK Hutchison
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITOCHU and CKHUF is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ITOCHU 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 ITOCHU 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 ITOCHU 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 ITOCHU i.e., ITOCHU and CK Hutchison go up and down completely randomly.
Pair Corralation between ITOCHU and CK Hutchison
Assuming the 90 days horizon ITOCHU is expected to generate 1.55 times less return on investment than CK Hutchison. But when comparing it to its historical volatility, ITOCHU is 1.36 times less risky than CK Hutchison. It trades about 0.05 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 314.00 in CK Hutchison Holdings on August 26, 2024 and sell it today you would earn a total of 181.00 from holding CK Hutchison Holdings or generate 57.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.63% |
| Values | Daily Returns |
ITOCHU vs. CK Hutchison Holdings
Performance |
| Timeline |
| ITOCHU |
| CK Hutchison Holdings |
ITOCHU and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITOCHU and CK Hutchison
The main advantage of trading using opposite ITOCHU and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITOCHU 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.| ITOCHU vs. Sumitomo Corp ADR | ITOCHU vs. Mitsui Co | ITOCHU vs. Marubeni Corp ADR | ITOCHU vs. Mitsubishi Corp |
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..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |