Correlation Between Western Bulk and Hutchison Port
Can any of the company-specific risk be diversified away by investing in both Western Bulk 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 Western Bulk and Hutchison Port into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Bulk Chartering and Hutchison Port Holdings, you can compare the effects of market volatilities on Western Bulk 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 Western Bulk with a short position of Hutchison Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Bulk and Hutchison Port.
Diversification Opportunities for Western Bulk and Hutchison Port
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Hutchison is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering 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 Western Bulk 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 Western Bulk Chartering 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 Western Bulk i.e., Western Bulk and Hutchison Port go up and down completely randomly.
Pair Corralation between Western Bulk and Hutchison Port
Assuming the 90 days horizon Western Bulk Chartering is expected to under-perform the Hutchison Port. In addition to that, Western Bulk is 1.57 times more volatile than Hutchison Port Holdings. It trades about -0.25 of its total potential returns per unit of risk. Hutchison Port Holdings is currently generating about 0.24 per unit of volatility. If you would invest 282.00 in Hutchison Port Holdings on August 31, 2024 and sell it today you would earn a total of 63.00 from holding Hutchison Port Holdings or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Bulk Chartering vs. Hutchison Port Holdings
Performance |
| Timeline |
| Western Bulk Chartering |
| Hutchison Port Holdings |
Western Bulk and Hutchison Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Bulk and Hutchison Port
The main advantage of trading using opposite Western Bulk and Hutchison Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk 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.| Western Bulk vs. SITC International Holdings | Western Bulk vs. Pacific Basin Shipping | Western Bulk vs. SITC International Holdings | Western Bulk vs. Mitsui OSK Lines |
| Hutchison Port vs. Kawasaki Kisen Kaisha | Hutchison Port vs. MPC Container Ships | Hutchison Port vs. Hapag Lloyd Aktiengesellschaft | Hutchison Port vs. Mitsui OSK Lines |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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