Correlation Between CapitaLand Investment and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and COFCO Joycome 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 CapitaLand Investment and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapitaLand Investment Limited and COFCO Joycome Foods, you can compare the effects of market volatilities on CapitaLand Investment and COFCO Joycome 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 CapitaLand Investment with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and COFCO Joycome.
Diversification Opportunities for CapitaLand Investment and COFCO Joycome
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CapitaLand and COFCO is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and CapitaLand Investment 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 CapitaLand Investment Limited are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and COFCO Joycome go up and down completely randomly.
Pair Corralation between CapitaLand Investment and COFCO Joycome
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.29 times more return on investment than COFCO Joycome. However, CapitaLand Investment Limited is 3.48 times less risky than COFCO Joycome. It trades about -0.09 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.04 per unit of risk. If you would invest 193.00 in CapitaLand Investment Limited on September 12, 2024 and sell it today you would lose (5.00) from holding CapitaLand Investment Limited or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. COFCO Joycome Foods
Performance |
| Timeline |
| CapitaLand Investment |
| COFCO Joycome Foods |
CapitaLand Investment and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and COFCO Joycome
The main advantage of trading using opposite CapitaLand Investment and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. SIVERS SEMICONDUCTORS AB | CapitaLand Investment vs. Reliance Steel Aluminum | CapitaLand Investment vs. CHINA HUARONG ENERHD 50 |
| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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