Correlation Between SITC International and Hutchison Port
Can any of the company-specific risk be diversified away by investing in both SITC International and Hutchison Port 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 SITC International and Hutchison Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SITC International Holdings and Hutchison Port Holdings, you can compare the effects of market volatilities on SITC International and Hutchison Port 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 SITC International with a short position of Hutchison Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of SITC International and Hutchison Port.
Diversification Opportunities for SITC International and Hutchison Port
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SITC and Hutchison is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SITC International Holdings and Hutchison Port Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Port Holdings and SITC International 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 SITC International Holdings are associated (or correlated) with Hutchison Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Port Holdings has no effect on the direction of SITC International i.e., SITC International and Hutchison Port go up and down completely randomly.
Pair Corralation between SITC International and Hutchison Port
Assuming the 90 days horizon SITC International is expected to generate 1.2 times less return on investment than Hutchison Port. In addition to that, SITC International is 2.39 times more volatile than Hutchison Port Holdings. It trades about 0.04 of its total potential returns per unit of risk. Hutchison Port Holdings is currently generating about 0.13 per unit of volatility. If you would invest 310.00 in Hutchison Port Holdings on August 27, 2024 and sell it today you would earn a total of 35.00 from holding Hutchison Port Holdings or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SITC International Holdings vs. Hutchison Port Holdings
Performance |
| Timeline |
| SITC International |
| Hutchison Port Holdings |
SITC International and Hutchison Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SITC International and Hutchison Port
The main advantage of trading using opposite SITC International and Hutchison Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SITC International position performs unexpectedly, Hutchison Port 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 Hutchison Port will offset losses from the drop in Hutchison Port's long position.| SITC International vs. Nippon Yusen Kabushiki | SITC International vs. AP Moeller | SITC International vs. Orient Overseas Limited | SITC International vs. Western Bulk Chartering |
| Hutchison Port vs. AP Mller | Hutchison Port vs. COSCO SHIPPING Holdings | Hutchison Port vs. Orient Overseas Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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