Correlation Between Jardine Cycle and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Jardine Cycle 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 Jardine Cycle and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Cycle Carriage and CK Hutchison Holdings, you can compare the effects of market volatilities on Jardine Cycle 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 Jardine Cycle with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Cycle and CK Hutchison.
Diversification Opportunities for Jardine Cycle and CK Hutchison
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jardine and CKHUF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Cycle Carriage 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 Jardine Cycle 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 Jardine Cycle Carriage 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 Jardine Cycle i.e., Jardine Cycle and CK Hutchison go up and down completely randomly.
Pair Corralation between Jardine Cycle and CK Hutchison
Assuming the 90 days horizon Jardine Cycle Carriage is expected to under-perform the CK Hutchison. But the pink sheet apears to be less risky and, when comparing its historical volatility, Jardine Cycle Carriage is 15.99 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 203.00 in CK Hutchison Holdings on August 30, 2024 and sell it today you would earn a total of 315.00 from holding CK Hutchison Holdings or generate 155.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.99% |
| Values | Daily Returns |
Jardine Cycle Carriage vs. CK Hutchison Holdings
Performance |
| Timeline |
| Jardine Cycle Carriage |
| CK Hutchison Holdings |
Jardine Cycle and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Cycle and CK Hutchison
The main advantage of trading using opposite Jardine Cycle and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Cycle 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.| Jardine Cycle vs. CK Hutchison Holdings | Jardine Cycle vs. CK Hutchison Holdings | Jardine Cycle vs. 3M Company | Jardine Cycle vs. Honeywell International |
| CK Hutchison vs. Jardine Cycle Carriage | CK Hutchison vs. CK Hutchison Holdings | CK Hutchison vs. 3M Company | CK Hutchison vs. Swire Pacific Ltd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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