Correlation Between Windrock Land and CK Hutchison

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

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

Diversification Opportunities for Windrock Land and CK Hutchison

0.1

Correlation Coefficient

Windrock Land  CK Hutchison

Average diversification

The 3 months correlation between Windrock and CKHUY is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Windrock Land Co 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 Windrock Land 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 Windrock Land Co 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 Windrock Land i.e., Windrock Land and CK Hutchison go up and down completely randomly.

Pair Corralation between Windrock Land and CK Hutchison

Given the investment horizon of 90 days Windrock Land Co is expected to generate 0.68 times more return on investment than CK Hutchison. However, Windrock Land Co is 1.47 times less risky than CK Hutchison. It trades about 0.2 of its potential returns per unit of risk. CK Hutchison Holdings is currently generating about -0.04 per unit of risk. If you would invest  48,412  in Windrock Land Co on September 4, 2024 and sell it today you would earn a total of  1,588  from holding Windrock Land Co or generate 3.28% return on investment over 90 days.

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

Windrock Land Co  vs.  CK Hutchison Holdings

Windrock Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Windrock Land Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Windrock Land is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

CK Hutchison Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CK Hutchison Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CK Hutchison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Windrock Land and CK Hutchison

The main advantage of trading using opposite Windrock Land and CK Hutchison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windrock Land 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 Windrock Land Co 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 CEOs Directory module to screen CEOs from public companies around the world.