Correlation Between MDU Resources and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both MDU Resources 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 MDU Resources and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDU Resources Group and CK Hutchison Holdings, you can compare the effects of market volatilities on MDU Resources 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 MDU Resources with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDU Resources and CK Hutchison.
Diversification Opportunities for MDU Resources and CK Hutchison
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MDU and CKHUY is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MDU Resources Group 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 MDU Resources 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 MDU Resources Group 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 MDU Resources i.e., MDU Resources and CK Hutchison go up and down completely randomly.
Pair Corralation between MDU Resources and CK Hutchison
Considering the 90-day investment horizon MDU Resources Group is expected to generate 1.14 times more return on investment than CK Hutchison. However, MDU Resources is 1.14 times more volatile than CK Hutchison Holdings. It trades about 0.19 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about 0.03 per unit of risk. If you would invest 1,330 in MDU Resources Group on September 3, 2024 and sell it today you would earn a total of 674.00 from holding MDU Resources Group or generate 50.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDU Resources Group vs. CK Hutchison Holdings
Performance |
| Timeline |
| MDU Resources Group |
| CK Hutchison Holdings |
MDU Resources and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDU Resources and CK Hutchison
The main advantage of trading using opposite MDU Resources and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDU Resources 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.| MDU Resources vs. Griffon | MDU Resources vs. Brookfield Business Partners | MDU Resources vs. Matthews International | MDU Resources vs. Steel Partners Holdings |
| CK Hutchison vs. TOMI Environmental Solutions | CK Hutchison vs. SCOR PK | CK Hutchison vs. HUMANA INC | CK Hutchison vs. Aquagold International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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