Correlation Between CapitaLand Investment and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and LIFEWAY 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 LIFEWAY 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 LIFEWAY FOODS, you can compare the effects of market volatilities on CapitaLand Investment and LIFEWAY 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and LIFEWAY FOODS.
Diversification Opportunities for CapitaLand Investment and LIFEWAY FOODS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CapitaLand and LIFEWAY is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between CapitaLand Investment and LIFEWAY FOODS
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.3 times more return on investment than LIFEWAY FOODS. However, CapitaLand Investment Limited is 3.28 times less risky than LIFEWAY FOODS. It trades about -0.06 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about -0.07 per unit of risk. If you would invest 195.00 in CapitaLand Investment Limited on August 28, 2024 and sell it today you would lose (3.00) from holding CapitaLand Investment Limited or give up 1.54% 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. LIFEWAY FOODS
Performance |
| Timeline |
| CapitaLand Investment |
| LIFEWAY FOODS |
CapitaLand Investment and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and LIFEWAY FOODS
The main advantage of trading using opposite CapitaLand Investment and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, LIFEWAY 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS's long position.| CapitaLand Investment vs. COSTAR GROUP INC | CapitaLand Investment vs. VONOVIA SE ADR | CapitaLand Investment vs. Vonovia SE | CapitaLand Investment vs. Wharf Real Estate |
| LIFEWAY FOODS vs. Microchip Technology Incorporated | LIFEWAY FOODS vs. DXC Technology Co | LIFEWAY FOODS vs. CapitaLand Investment Limited | LIFEWAY FOODS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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