Correlation Between CapitaLand Investment and COMPUTERSHARE
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE, you can compare the effects of market volatilities on CapitaLand Investment and COMPUTERSHARE 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 COMPUTERSHARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and COMPUTERSHARE.
Diversification Opportunities for CapitaLand Investment and COMPUTERSHARE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CapitaLand and COMPUTERSHARE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and COMPUTERSHARE go up and down completely randomly.
Pair Corralation between CapitaLand Investment and COMPUTERSHARE
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the COMPUTERSHARE. But the stock apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 1.59 times less risky than COMPUTERSHARE. The stock trades about -0.1 of its potential returns per unit of risk. The COMPUTERSHARE is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,600 in COMPUTERSHARE on August 31, 2024 and sell it today you would earn a total of 340.00 from holding COMPUTERSHARE or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. COMPUTERSHARE
Performance |
| Timeline |
| CapitaLand Investment |
| COMPUTERSHARE |
CapitaLand Investment and COMPUTERSHARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and COMPUTERSHARE
The main advantage of trading using opposite CapitaLand Investment and COMPUTERSHARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, COMPUTERSHARE 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 COMPUTERSHARE will offset losses from the drop in COMPUTERSHARE's long position.| CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Wharf Real Estate | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings |
| COMPUTERSHARE vs. CapitaLand Investment Limited | COMPUTERSHARE vs. DIVERSIFIED ROYALTY | COMPUTERSHARE vs. SLR Investment Corp | COMPUTERSHARE vs. Reinsurance Group of |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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