Correlation Between CapitaLand Investment and PREMIER FOODS
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and PREMIER FOODS 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 PREMIER FOODS 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 PREMIER FOODS, you can compare the effects of market volatilities on CapitaLand Investment and PREMIER FOODS 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 PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and PREMIER FOODS.
Diversification Opportunities for CapitaLand Investment and PREMIER FOODS
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and PREMIER is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS 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 PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and PREMIER FOODS go up and down completely randomly.
Pair Corralation between CapitaLand Investment and PREMIER FOODS
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the PREMIER FOODS. But the stock apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 1.32 times less risky than PREMIER FOODS. The stock trades about -0.09 of its potential returns per unit of risk. The PREMIER FOODS is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 232.00 in PREMIER FOODS on September 12, 2024 and sell it today you would lose (6.00) from holding PREMIER FOODS or give up 2.59% 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. PREMIER FOODS
Performance |
| Timeline |
| CapitaLand Investment |
| PREMIER FOODS |
CapitaLand Investment and PREMIER FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and PREMIER FOODS
The main advantage of trading using opposite CapitaLand Investment and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS'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 |
| PREMIER FOODS vs. Japan Asia Investment | PREMIER FOODS vs. CapitaLand Investment Limited | PREMIER FOODS vs. SALESFORCE INC CDR | PREMIER FOODS vs. Apollo Investment Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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