Correlation Between Data#3 and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Data#3 and CapitaLand Investment 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 Data#3 and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data3 Limited and CapitaLand Investment Limited, you can compare the effects of market volatilities on Data#3 and CapitaLand Investment 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 Data#3 with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data#3 and CapitaLand Investment.
Diversification Opportunities for Data#3 and CapitaLand Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Data#3 and CapitaLand is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Data3 Limited and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Data#3 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 Data3 Limited are associated (or correlated) with CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Data#3 i.e., Data#3 and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Data#3 and CapitaLand Investment
Assuming the 90 days horizon Data3 Limited is expected to generate 1.29 times more return on investment than CapitaLand Investment. However, Data#3 is 1.29 times more volatile than CapitaLand Investment Limited. It trades about 0.23 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.05 per unit of risk. If you would invest 434.00 in Data3 Limited on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Data3 Limited or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data3 Limited vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Data3 Limited |
| CapitaLand Investment |
Data#3 and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data#3 and CapitaLand Investment
The main advantage of trading using opposite Data#3 and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data#3 position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| Data#3 vs. FUJITSU LTD ADR | Data#3 vs. Superior Plus Corp | Data#3 vs. NMI Holdings | Data#3 vs. Origin Agritech |
| CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Wharf Real Estate | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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