Correlation Between CK Hutchison and Arca Continental
Can any of the company-specific risk be diversified away by investing in both CK Hutchison and Arca Continental 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 Arca Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Hutchison Holdings and Arca Continental SAB, you can compare the effects of market volatilities on CK Hutchison and Arca Continental 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 Arca Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Hutchison and Arca Continental.
Diversification Opportunities for CK Hutchison and Arca Continental
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKHUF and Arca is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Arca Continental SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arca Continental 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 Holdings are associated (or correlated) with Arca Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arca Continental SAB has no effect on the direction of CK Hutchison i.e., CK Hutchison and Arca Continental go up and down completely randomly.
Pair Corralation between CK Hutchison and Arca Continental
Assuming the 90 days horizon CK Hutchison Holdings is expected to under-perform the Arca Continental. In addition to that, CK Hutchison is 1.33 times more volatile than Arca Continental SAB. It trades about 0.0 of its total potential returns per unit of risk. Arca Continental SAB is currently generating about 0.14 per unit of volatility. If you would invest 842.00 in Arca Continental SAB on December 2, 2024 and sell it today you would earn a total of 178.00 from holding Arca Continental SAB or generate 21.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 83.61% |
Values | Daily Returns |
CK Hutchison Holdings vs. Arca Continental SAB
Performance |
Timeline |
CK Hutchison Holdings |
Arca Continental SAB |
CK Hutchison and Arca Continental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CK Hutchison and Arca Continental
The main advantage of trading using opposite CK Hutchison and Arca Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Hutchison position performs unexpectedly, Arca Continental 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 Arca Continental will offset losses from the drop in Arca Continental's long position.CK Hutchison vs. Jardine Cycle Carriage | CK Hutchison vs. CK Hutchison Holdings | CK Hutchison vs. 3M Company | CK Hutchison vs. Swire Pacific Ltd |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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