Correlation Between CapitaLand Investment and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on CapitaLand Investment and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Brockhaus Capital.
Diversification Opportunities for CapitaLand Investment and Brockhaus Capital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CapitaLand and Brockhaus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Brockhaus Capital go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Brockhaus Capital
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.67 times more return on investment than Brockhaus Capital. However, CapitaLand Investment Limited is 1.49 times less risky than Brockhaus Capital. It trades about -0.04 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about -0.13 per unit of risk. If you would invest 196.00 in CapitaLand Investment Limited on September 12, 2024 and sell it today you would lose (9.00) from holding CapitaLand Investment Limited or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Brockhaus Capital Management
Performance |
| Timeline |
| CapitaLand Investment |
| Brockhaus Capital |
CapitaLand Investment and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Brockhaus Capital
The main advantage of trading using opposite CapitaLand Investment and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. SIVERS SEMICONDUCTORS AB | CapitaLand Investment vs. Reliance Steel Aluminum | CapitaLand Investment vs. CHINA HUARONG ENERHD 50 |
| Brockhaus Capital vs. Ameriprise Financial | Brockhaus Capital vs. Ares Management Corp | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. SIVERS SEMICONDUCTORS AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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