Correlation Between CapitaLand Investment and Automatic Data
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on CapitaLand Investment and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Automatic Data.
Diversification Opportunities for CapitaLand Investment and Automatic Data
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and Automatic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Automatic Data go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Automatic Data
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the Automatic Data. In addition to that, CapitaLand Investment is 1.14 times more volatile than Automatic Data Processing. It trades about -0.05 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.32 per unit of volatility. If you would invest 26,815 in Automatic Data Processing on September 1, 2024 and sell it today you would earn a total of 2,295 from holding Automatic Data Processing or generate 8.56% 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. Automatic Data Processing
Performance |
| Timeline |
| CapitaLand Investment |
| Automatic Data Processing |
CapitaLand Investment and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Automatic Data
The main advantage of trading using opposite CapitaLand Investment and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data'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 |
| Automatic Data vs. Global Ship Lease | Automatic Data vs. BOSTON BEER A | Automatic Data vs. National Beverage Corp | Automatic Data vs. Digilife Technologies Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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