Correlation Between CapitaLand Investment and ALERION CLEANPOWER
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER, you can compare the effects of market volatilities on CapitaLand Investment and ALERION CLEANPOWER 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 ALERION CLEANPOWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and ALERION CLEANPOWER.
Diversification Opportunities for CapitaLand Investment and ALERION CLEANPOWER
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and ALERION is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and ALERION CLEANPOWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALERION CLEANPOWER 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 ALERION CLEANPOWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALERION CLEANPOWER has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and ALERION CLEANPOWER go up and down completely randomly.
Pair Corralation between CapitaLand Investment and ALERION CLEANPOWER
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.7 times more return on investment than ALERION CLEANPOWER. However, CapitaLand Investment Limited is 1.44 times less risky than ALERION CLEANPOWER. It trades about -0.01 of its potential returns per unit of risk. ALERION CLEANPOWER is currently generating about -0.05 per unit of risk. If you would invest 216.00 in CapitaLand Investment Limited on August 30, 2024 and sell it today you would lose (21.00) from holding CapitaLand Investment Limited or give up 9.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. ALERION CLEANPOWER
Performance |
| Timeline |
| CapitaLand Investment |
| ALERION CLEANPOWER |
CapitaLand Investment and ALERION CLEANPOWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and ALERION CLEANPOWER
The main advantage of trading using opposite CapitaLand Investment and ALERION CLEANPOWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, ALERION CLEANPOWER 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 ALERION CLEANPOWER will offset losses from the drop in ALERION CLEANPOWER's long position.| CapitaLand Investment vs. Vonovia SE | CapitaLand Investment vs. Wharf Real Estate | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings |
| ALERION CLEANPOWER vs. Choice Hotels International | ALERION CLEANPOWER vs. MIRAMAR HOTEL INV | ALERION CLEANPOWER vs. Hyatt Hotels | ALERION CLEANPOWER vs. Summit Hotel Properties |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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