Correlation Between CK Hutchison and Grupo Bimbo

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

Diversification Opportunities for CK Hutchison and Grupo Bimbo

0.15

Correlation Coefficient

CK Hutchison  Grupo Bimbo

Average diversification

The 3 months correlation between CKHUF and Grupo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CK Hutchison Holdings and Grupo Bimbo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Bimbo 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 Grupo Bimbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Bimbo SAB has no effect on the direction of CK Hutchison i.e., CK Hutchison and Grupo Bimbo go up and down completely randomly.

Pair Corralation between CK Hutchison and Grupo Bimbo

Assuming the 90 days horizon CK Hutchison Holdings is expected to generate 0.96 times more return on investment than Grupo Bimbo. However, CK Hutchison Holdings is 1.04 times less risky than Grupo Bimbo. It trades about 0.06 of its potential returns per unit of risk. Grupo Bimbo SAB is currently generating about 0.04 per unit of risk. If you would invest  538.00  in CK Hutchison Holdings on December 28, 2024 and sell it today you would earn a total of  52.00  from holding CK Hutchison Holdings or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

CK Hutchison Holdings  vs.  Grupo Bimbo SAB

CK Hutchison Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CK Hutchison Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CK Hutchison reported solid returns over the last few months and may actually be approaching a breakup point.

Grupo Bimbo SAB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Bimbo SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Grupo Bimbo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CK Hutchison and Grupo Bimbo

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

The idea behind CK Hutchison Holdings and Grupo Bimbo 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.