Correlation Between Teijin and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both Teijin 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 Teijin and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teijin and CK Hutchison Holdings, you can compare the effects of market volatilities on Teijin 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 Teijin with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teijin and CK Hutchison.
Diversification Opportunities for Teijin and CK Hutchison
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teijin and CKHUY is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Teijin 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 Teijin 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 Teijin 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 Teijin i.e., Teijin and CK Hutchison go up and down completely randomly.
Pair Corralation between Teijin and CK Hutchison
Assuming the 90 days horizon Teijin is expected to under-perform the CK Hutchison. In addition to that, Teijin is 1.68 times more volatile than CK Hutchison Holdings. It trades about -0.03 of its total potential returns per unit of risk. CK Hutchison Holdings is currently generating about 0.04 per unit of volatility. If you would invest 485.00 in CK Hutchison Holdings on September 1, 2024 and sell it today you would earn a total of 35.00 from holding CK Hutchison Holdings or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teijin vs. CK Hutchison Holdings
Performance |
| Timeline |
| Teijin |
| CK Hutchison Holdings |
Teijin and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teijin and CK Hutchison
The main advantage of trading using opposite Teijin and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teijin 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.| Teijin vs. Toray Industries ADR | Teijin vs. Nitto Denko Corp | Teijin vs. NSK Ltd ADR | Teijin vs. Secom Co Ltd |
| CK Hutchison vs. Swire Pacific | CK Hutchison vs. Marubeni | CK Hutchison vs. Sumitomo Corp ADR | CK Hutchison vs. Marubeni Corp ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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