Correlation Between CapitaLand Investment and WI LAN
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and WI LAN 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 WI LAN 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 WI LAN, you can compare the effects of market volatilities on CapitaLand Investment and WI LAN 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 WI LAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and WI LAN.
Diversification Opportunities for CapitaLand Investment and WI LAN
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CapitaLand and WJL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and WI LAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WI LAN 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 WI LAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WI LAN has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and WI LAN go up and down completely randomly.
Pair Corralation between CapitaLand Investment and WI LAN
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the WI LAN. But the stock apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 3.34 times less risky than WI LAN. The stock trades about -0.07 of its potential returns per unit of risk. The WI LAN is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 104.00 in WI LAN on September 5, 2024 and sell it today you would earn a total of 6.00 from holding WI LAN or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. WI LAN
Performance |
| Timeline |
| CapitaLand Investment |
| WI LAN |
CapitaLand Investment and WI LAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and WI LAN
The main advantage of trading using opposite CapitaLand Investment and WI LAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, WI LAN 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 WI LAN will offset losses from the drop in WI LAN's long position.| CapitaLand Investment vs. Iridium Communications | CapitaLand Investment vs. Charter Communications | CapitaLand Investment vs. Apollo Investment Corp | CapitaLand Investment vs. WisdomTree Investments |
| WI LAN vs. CapitaLand Investment Limited | WI LAN vs. Hemisphere Energy Corp | WI LAN vs. Virtus Investment Partners | WI LAN vs. PennantPark 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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