Correlation Between Swire Pacific and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Swire Pacific 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 Swire Pacific and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Pacific and CK Hutchison Holdings, you can compare the effects of market volatilities on Swire Pacific 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 Swire Pacific with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Pacific and CK Hutchison.
Diversification Opportunities for Swire Pacific and CK Hutchison
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swire and CKHUY is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Swire Pacific 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 Swire Pacific 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 Swire Pacific 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 Swire Pacific i.e., Swire Pacific and CK Hutchison go up and down completely randomly.
Pair Corralation between Swire Pacific and CK Hutchison
Assuming the 90 days horizon Swire Pacific is expected to generate 1.28 times more return on investment than CK Hutchison. However, Swire Pacific is 1.28 times more volatile than CK Hutchison Holdings. It trades about 0.05 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about -0.02 per unit of risk. If you would invest 637.00 in Swire Pacific on August 29, 2024 and sell it today you would earn a total of 189.00 from holding Swire Pacific or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swire Pacific vs. CK Hutchison Holdings
Performance |
| Timeline |
| Swire Pacific |
| CK Hutchison Holdings |
Swire Pacific and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Pacific and CK Hutchison
The main advantage of trading using opposite Swire Pacific and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Pacific 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.| Swire Pacific vs. CK Hutchison Holdings | Swire Pacific vs. Marubeni | Swire Pacific vs. Sumitomo Corp ADR | Swire Pacific vs. Marubeni Corp ADR |
| CK Hutchison vs. Element Solutions | CK Hutchison vs. Orion Engineered Carbons | CK Hutchison vs. Minerals Technologies | CK Hutchison vs. Ingevity Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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