Correlation Between CK Infrastructure and WSP Global

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

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

Diversification Opportunities for CK Infrastructure and WSP Global

-0.14

Correlation Coefficient

CK Infrastructure  WSP Global

Good diversification

The 3 months correlation between CHH and WSP is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CK Infrastructure Holdings and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global and CK Infrastructure 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 Infrastructure Holdings are associated (or correlated) with WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of CK Infrastructure i.e., CK Infrastructure and WSP Global go up and down completely randomly.

Pair Corralation between CK Infrastructure and WSP Global

Assuming the 90 days horizon CK Infrastructure is expected to generate 3.09 times less return on investment than WSP Global. In addition to that, CK Infrastructure is 1.51 times more volatile than WSP Global. It trades about 0.04 of its total potential returns per unit of risk. WSP Global is currently generating about 0.18 per unit of volatility. If you would invest  15,379  in WSP Global on April 23, 2025 and sell it today you would earn a total of  2,521  from holding WSP Global or generate 16.39% return on investment over 90 days.

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

CK Infrastructure Holdings  vs.  WSP Global

CK Infrastructure

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CK Infrastructure Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CK Infrastructure is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

WSP Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WSP Global are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, WSP Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CK Infrastructure and WSP Global

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

The idea behind CK Infrastructure Holdings and WSP Global 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.