Correlation Between CapitaLand Investment and Data#3
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Data#3 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 Data#3 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 Data3 Limited, you can compare the effects of market volatilities on CapitaLand Investment and Data#3 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 Data#3. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Data#3.
Diversification Opportunities for CapitaLand Investment and Data#3
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CapitaLand and Data#3 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Data3 Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 Limited 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 Data#3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 Limited has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Data#3 go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Data#3
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the Data#3. But the stock apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 1.29 times less risky than Data#3. The stock trades about -0.05 of its potential returns per unit of risk. The Data3 Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. 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 |
CapitaLand Investment Limited vs. Data3 Limited
Performance |
| Timeline |
| CapitaLand Investment |
| Data3 Limited |
CapitaLand Investment and Data#3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Data#3
The main advantage of trading using opposite CapitaLand Investment and Data#3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Data#3 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 Data#3 will offset losses from the drop in Data#3's long position.| CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings | CapitaLand Investment vs. Origin Agritech |
| Data#3 vs. FUJITSU LTD ADR | Data#3 vs. Superior Plus Corp | Data#3 vs. NMI Holdings | Data#3 vs. Origin Agritech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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