Correlation Between CapitaLand Investment and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and GFL ENVIRONM 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 GFL ENVIRONM 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 GFL ENVIRONM, you can compare the effects of market volatilities on CapitaLand Investment and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and GFL ENVIRONM.
Diversification Opportunities for CapitaLand Investment and GFL ENVIRONM
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CapitaLand and GFL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between CapitaLand Investment and GFL ENVIRONM
Assuming the 90 days horizon CapitaLand Investment is expected to generate 3.52 times less return on investment than GFL ENVIRONM. But when comparing it to its historical volatility, CapitaLand Investment Limited is 1.08 times less risky than GFL ENVIRONM. It trades about 0.04 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,537 in GFL ENVIRONM on September 3, 2024 and sell it today you would earn a total of 983.00 from holding GFL ENVIRONM or generate 27.79% 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. GFL ENVIRONM
Performance |
| Timeline |
| CapitaLand Investment |
| GFL ENVIRONM |
CapitaLand Investment and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and GFL ENVIRONM
The main advantage of trading using opposite CapitaLand Investment and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| CapitaLand Investment vs. COSTAR GROUP INC | CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Vonovia SE | CapitaLand Investment vs. Vonovia SE |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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