Correlation Between CK HUTCHISON and NXP Semiconductors

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Can any of the company-specific risk be diversified away by investing in both CK HUTCHISON and NXP Semiconductors 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 NXP Semiconductors 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 NXP Semiconductors NV, you can compare the effects of market volatilities on CK HUTCHISON and NXP Semiconductors 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 NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK HUTCHISON and NXP Semiconductors.

Diversification Opportunities for CK HUTCHISON and NXP Semiconductors

2CKANXPDiversified Away2CKANXPDiversified Away100%
-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between 2CKA and NXP is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CK HUTCHISON HLDGS and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors 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 NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of CK HUTCHISON i.e., CK HUTCHISON and NXP Semiconductors go up and down completely randomly.

Pair Corralation between CK HUTCHISON and NXP Semiconductors

Assuming the 90 days trading horizon CK HUTCHISON HLDGS is expected to generate 0.47 times more return on investment than NXP Semiconductors. However, CK HUTCHISON HLDGS is 2.13 times less risky than NXP Semiconductors. It trades about 0.0 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about -0.02 per unit of risk. If you would invest  466.00  in CK HUTCHISON HLDGS on October 20, 2024 and sell it today you would lose (2.00) from holding CK HUTCHISON HLDGS or give up 0.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CK HUTCHISON HLDGS  vs.  NXP Semiconductors NV

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510
JavaScript chart by amCharts 3.21.152CKA VNX
       Timeline  
CK HUTCHISON HLDGS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4.54.554.64.654.74.754.84.854.94.95
NXP Semiconductors 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NXP Semiconductors NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NXP Semiconductors is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan200205210215220225230235

CK HUTCHISON and NXP Semiconductors Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.72-1.3-0.88-0.46-0.060.260.681.11.521.94 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.152CKA VNX
       Returns  

Pair Trading with CK HUTCHISON and NXP Semiconductors

The main advantage of trading using opposite CK HUTCHISON and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK HUTCHISON position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' long position.
The idea behind CK HUTCHISON HLDGS and NXP Semiconductors NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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