Correlation Between CapitaLand Investment and Internet Thailand
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Internet Thailand 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 Internet Thailand 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 Internet Thailand PCL, you can compare the effects of market volatilities on CapitaLand Investment and Internet Thailand 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 Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Internet Thailand.
Diversification Opportunities for CapitaLand Investment and Internet Thailand
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and Internet is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL 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 Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Internet Thailand go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Internet Thailand
Assuming the 90 days horizon CapitaLand Investment is expected to generate 33.43 times less return on investment than Internet Thailand. But when comparing it to its historical volatility, CapitaLand Investment Limited is 2.96 times less risky than Internet Thailand. It trades about 0.01 of its potential returns per unit of risk. Internet Thailand PCL is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Internet Thailand PCL on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Internet Thailand PCL or generate 45.45% 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. Internet Thailand PCL
Performance |
| Timeline |
| CapitaLand Investment |
| Internet Thailand PCL |
CapitaLand Investment and Internet Thailand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Internet Thailand
The main advantage of trading using opposite CapitaLand Investment and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand's long position.| CapitaLand Investment vs. COSTAR GROUP INC | CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. VONOVIA SE ADR | CapitaLand Investment vs. Vonovia SE |
| Internet Thailand vs. Marie Brizard Wine | Internet Thailand vs. Harmony Gold Mining | Internet Thailand vs. CapitaLand Investment Limited | Internet Thailand vs. MGIC INVESTMENT |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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