Correlation Between Grupo Bimbo and CK Hutchison

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

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

Diversification Opportunities for Grupo Bimbo and CK Hutchison

0.23

Correlation Coefficient

Grupo Bimbo  CK Hutchison

Modest diversification

The 3 months correlation between Grupo and CKHUF is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and CK Hutchison Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Hutchison Holdings and Grupo Bimbo 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 Grupo Bimbo SAB are associated (or correlated) with CK Hutchison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Hutchison Holdings has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and CK Hutchison go up and down completely randomly.

Pair Corralation between Grupo Bimbo and CK Hutchison

Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the CK Hutchison. In addition to that, Grupo Bimbo is 1.22 times more volatile than CK Hutchison Holdings. It trades about -0.05 of its total potential returns per unit of risk. CK Hutchison Holdings is currently generating about 0.0 per unit of volatility. If you would invest  525.00  in CK Hutchison Holdings on December 1, 2024 and sell it today you would lose (15.00) from holding CK Hutchison Holdings or give up 2.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.33%
Values	Daily Returns

Grupo Bimbo SAB  vs.  CK Hutchison Holdings

Grupo Bimbo SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Bimbo SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CK Hutchison Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Grupo Bimbo and CK Hutchison

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

The idea behind Grupo Bimbo SAB and CK Hutchison Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.