Correlation Between Shanghai Industrial and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Shanghai Industrial 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 Shanghai Industrial and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Industrial Holdings and CK Hutchison Holdings, you can compare the effects of market volatilities on Shanghai Industrial 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 Shanghai Industrial with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Industrial and CK Hutchison.
Diversification Opportunities for Shanghai Industrial and CK Hutchison
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and CKHUY is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Industrial Holdings 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 Shanghai Industrial 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 Shanghai Industrial Holdings 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 Shanghai Industrial i.e., Shanghai Industrial and CK Hutchison go up and down completely randomly.
Pair Corralation between Shanghai Industrial and CK Hutchison
If you would invest 510.00 in CK Hutchison Holdings on September 20, 2024 and sell it today you would earn a total of 9.00 from holding CK Hutchison Holdings or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Shanghai Industrial Holdings vs. CK Hutchison Holdings
Performance |
| Timeline |
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CK Hutchison Holdings |
Shanghai Industrial and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Industrial and CK Hutchison
The main advantage of trading using opposite Shanghai Industrial and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Industrial 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.| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
| CK Hutchison vs. HUMANA INC | CK Hutchison vs. Barloworld Ltd ADR | CK Hutchison vs. Morningstar Unconstrained Allocation | CK Hutchison vs. Thrivent High Yield |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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