Correlation Between Marubeni and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Marubeni 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 Marubeni and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marubeni and CK Hutchison Holdings, you can compare the effects of market volatilities on Marubeni 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 Marubeni with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marubeni and CK Hutchison.
Diversification Opportunities for Marubeni and CK Hutchison
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marubeni and 2CK is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni 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 Marubeni 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 Marubeni 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 Marubeni i.e., Marubeni and CK Hutchison go up and down completely randomly.
Pair Corralation between Marubeni and CK Hutchison
Assuming the 90 days trading horizon Marubeni is expected to generate 1.3 times more return on investment than CK Hutchison. However, Marubeni is 1.3 times more volatile than CK Hutchison Holdings. It trades about -0.08 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about -0.24 per unit of risk. If you would invest 1,465 in Marubeni on November 4, 2024 and sell it today you would lose (35.00) from holding Marubeni or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marubeni vs. CK Hutchison Holdings
Performance |
| Timeline |
| Marubeni |
| CK Hutchison Holdings |
Marubeni and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marubeni and CK Hutchison
The main advantage of trading using opposite Marubeni and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni 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.| Marubeni vs. UPDATE SOFTWARE | Marubeni vs. Align Technology | Marubeni vs. DXC Technology Co | Marubeni vs. ScanSource |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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