Correlation Between CapitaLand Investment and Strategic Education
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on CapitaLand Investment and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Strategic Education.
Diversification Opportunities for CapitaLand Investment and Strategic Education
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CapitaLand and Strategic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Strategic Education go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Strategic Education
Assuming the 90 days horizon CapitaLand Investment is expected to generate 5.46 times less return on investment than Strategic Education. But when comparing it to its historical volatility, CapitaLand Investment Limited is 1.47 times less risky than Strategic Education. It trades about 0.02 of its potential returns per unit of risk. Strategic Education is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,589 in Strategic Education on September 4, 2024 and sell it today you would earn a total of 761.00 from holding Strategic Education or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Strategic Education
Performance |
| Timeline |
| CapitaLand Investment |
| Strategic Education |
CapitaLand Investment and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Strategic Education
The main advantage of trading using opposite CapitaLand Investment and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| CapitaLand Investment vs. DXC Technology Co | CapitaLand Investment vs. Vishay Intertechnology | CapitaLand Investment vs. JSC Halyk bank | CapitaLand Investment vs. Micron Technology |
| Strategic Education vs. PennyMac Mortgage Investment | Strategic Education vs. HK Electric Investments | Strategic Education vs. SEI INVESTMENTS | Strategic Education vs. CapitaLand Investment Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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