Correlation Between AAC TECHNOLOGHLDGADR and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and CapitaLand Investment 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 AAC TECHNOLOGHLDGADR and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and CapitaLand Investment Limited, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and CapitaLand Investment 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 AAC TECHNOLOGHLDGADR with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and CapitaLand Investment.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and CapitaLand Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AAC and CapitaLand is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and CapitaLand Investment go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and CapitaLand Investment
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 2.55 times more return on investment than CapitaLand Investment. However, AAC TECHNOLOGHLDGADR is 2.55 times more volatile than CapitaLand Investment Limited. It trades about 0.06 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.0 per unit of risk. If you would invest 255.00 in AAC TECHNOLOGHLDGADR on August 25, 2024 and sell it today you would earn a total of 115.00 from holding AAC TECHNOLOGHLDGADR or generate 45.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. CapitaLand Investment Limited
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| CapitaLand Investment |
AAC TECHNOLOGHLDGADR and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and CapitaLand Investment
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| AAC TECHNOLOGHLDGADR vs. CapitaLand Investment Limited | AAC TECHNOLOGHLDGADR vs. ON SEMICONDUCTOR | AAC TECHNOLOGHLDGADR vs. PennantPark Investment | AAC TECHNOLOGHLDGADR vs. MGIC INVESTMENT |
| CapitaLand Investment vs. JAPAN TOBACCO UNSPADR12 | CapitaLand Investment vs. MAVEN WIRELESS SWEDEN | CapitaLand Investment vs. Tradeweb Markets | CapitaLand Investment vs. CENTURIA OFFICE REIT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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