Correlation Between CapitaLand Investment and New Residential
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on CapitaLand Investment and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and New Residential.
Diversification Opportunities for CapitaLand Investment and New Residential
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and New is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and New Residential go up and down completely randomly.
Pair Corralation between CapitaLand Investment and New Residential
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the New Residential. In addition to that, CapitaLand Investment is 1.28 times more volatile than New Residential Investment. It trades about -0.17 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.15 per unit of volatility. If you would invest 987.00 in New Residential Investment on August 28, 2024 and sell it today you would earn a total of 65.00 from holding New Residential Investment or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. New Residential Investment
Performance |
| Timeline |
| CapitaLand Investment |
| New Residential Inve |
CapitaLand Investment and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and New Residential
The main advantage of trading using opposite CapitaLand Investment and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| CapitaLand Investment vs. COSTAR GROUP INC | CapitaLand Investment vs. VONOVIA SE ADR | CapitaLand Investment vs. Vonovia SE | CapitaLand Investment vs. Wharf Real Estate |
| New Residential vs. Xtrackers ShortDAX | New Residential vs. Xtrackers LevDAX | New Residential vs. Lyxor 1 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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