Correlation Between CARSALESCOM and CK Hutchison
Can any of the company-specific risk be diversified away by investing in both CARSALESCOM 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 CARSALESCOM and CK Hutchison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and CK Hutchison Holdings, you can compare the effects of market volatilities on CARSALESCOM 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 CARSALESCOM with a short position of CK Hutchison. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALESCOM and CK Hutchison.
Diversification Opportunities for CARSALESCOM and CK Hutchison
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CARSALESCOM and 2CK is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM i.e., CARSALESCOM and CK Hutchison go up and down completely randomly.
Pair Corralation between CARSALESCOM and CK Hutchison
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 1.2 times more return on investment than CK Hutchison. However, CARSALESCOM is 1.2 times more volatile than CK Hutchison Holdings. It trades about 0.04 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 2,280 in CARSALESCOM on October 26, 2024 and sell it today you would earn a total of 80.00 from holding CARSALESCOM or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. CK Hutchison Holdings
Performance |
| Timeline |
| CARSALESCOM |
| CK Hutchison Holdings |
CARSALESCOM and CK Hutchison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALESCOM and CK Hutchison
The main advantage of trading using opposite CARSALESCOM and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALESCOM 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.| CARSALESCOM vs. NXP Semiconductors NV | CARSALESCOM vs. Gaztransport Technigaz SA | CARSALESCOM vs. Nordic Semiconductor ASA | CARSALESCOM vs. ANTA SPORTS PRODUCT |
| CK Hutchison vs. IDP EDUCATION LTD | CK Hutchison vs. CARSALESCOM | CK Hutchison vs. Lamar Advertising | CK Hutchison vs. DEVRY EDUCATION GRP |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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