Correlation Between CK HUTCHISON and Grupo Carso

Can any of the company-specific risk be diversified away by investing in both CK HUTCHISON and Grupo Carso 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 CK HUTCHISON and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CK HUTCHISON HLDGS and Grupo Carso SAB, you can compare the effects of market volatilities on CK HUTCHISON and Grupo Carso 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 CK HUTCHISON with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK HUTCHISON and Grupo Carso.

Diversification Opportunities for CK HUTCHISON and Grupo Carso

-0.17

Correlation Coefficient

CK HUTCHISON  Grupo Carso

Good diversification

The 3 months correlation between 2CKA and Grupo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CK HUTCHISON HLDGS and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and CK HUTCHISON 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 CK HUTCHISON HLDGS are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of CK HUTCHISON i.e., CK HUTCHISON and Grupo Carso go up and down completely randomly.

Pair Corralation between CK HUTCHISON and Grupo Carso

Assuming the 90 days trading horizon CK HUTCHISON HLDGS is expected to under-perform the Grupo Carso. But the stock apears to be less risky and, when comparing its historical volatility, CK HUTCHISON HLDGS is 1.92 times less risky than Grupo Carso. The stock trades about -0.08 of its potential returns per unit of risk. The Grupo Carso SAB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Grupo Carso SAB on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Grupo Carso SAB or generate 2.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CK HUTCHISON HLDGS  vs.  Grupo Carso SAB

CK HUTCHISON HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CK HUTCHISON HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, CK HUTCHISON is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Grupo Carso SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CK HUTCHISON and Grupo Carso

The main advantage of trading using opposite CK HUTCHISON and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK HUTCHISON position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.

The idea behind CK HUTCHISON HLDGS and Grupo Carso SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.