Correlation Between Unipol Gruppo and CK HUTCHISON

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

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

Diversification Opportunities for Unipol Gruppo and CK HUTCHISON

0.38

Correlation Coefficient

Unipol Gruppo  CK HUTCHISON

Weak diversification

The 3 months correlation between Unipol and 2CKA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Unipol Gruppo Finanziario and CK HUTCHISON HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK HUTCHISON HLDGS and Unipol Gruppo 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 Unipol Gruppo Finanziario 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 HLDGS has no effect on the direction of Unipol Gruppo i.e., Unipol Gruppo and CK HUTCHISON go up and down completely randomly.

Pair Corralation between Unipol Gruppo and CK HUTCHISON

Assuming the 90 days trading horizon Unipol Gruppo Finanziario is expected to generate 0.43 times more return on investment than CK HUTCHISON. However, Unipol Gruppo Finanziario is 2.31 times less risky than CK HUTCHISON. It trades about 0.31 of its potential returns per unit of risk. CK HUTCHISON HLDGS is currently generating about 0.04 per unit of risk. If you would invest  1,176  in Unipol Gruppo Finanziario on December 26, 2024 and sell it today you would earn a total of  374.00  from holding Unipol Gruppo Finanziario or generate 31.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Unipol Gruppo Finanziario  vs.  CK HUTCHISON HLDGS

Unipol Gruppo Finanziario

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unipol Gruppo Finanziario are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Unipol Gruppo reported solid returns over the last few months and may actually be approaching a breakup point.

CK HUTCHISON HLDGS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CK HUTCHISON HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, CK HUTCHISON may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unipol Gruppo and CK HUTCHISON

The main advantage of trading using opposite Unipol Gruppo and CK HUTCHISON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unipol Gruppo 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 Unipol Gruppo Finanziario and CK HUTCHISON HLDGS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.