Correlation Between CapitaLand Investment and Postal Savings
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on CapitaLand Investment and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Postal Savings.
Diversification Opportunities for CapitaLand Investment and Postal Savings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CapitaLand and Postal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Postal Savings go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Postal Savings
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the Postal Savings. But the stock apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 4.69 times less risky than Postal Savings. The stock trades about -0.01 of its potential returns per unit of risk. The Postal Savings Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.39 in Postal Savings Bank on August 28, 2024 and sell it today you would earn a total of 46.61 from holding Postal Savings Bank or generate 630.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Postal Savings Bank
Performance |
| Timeline |
| CapitaLand Investment |
| Postal Savings Bank |
CapitaLand Investment and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Postal Savings
The main advantage of trading using opposite CapitaLand Investment and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' 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 |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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