Correlation Between BTB Real and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both BTB Real 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 BTB Real and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTB Real Estate and CapitaLand Investment Limited, you can compare the effects of market volatilities on BTB Real 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 BTB Real with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and CapitaLand Investment.
Diversification Opportunities for BTB Real and CapitaLand Investment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTB and CapitaLand is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and BTB Real 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 BTB Real Estate 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 BTB Real i.e., BTB Real and CapitaLand Investment go up and down completely randomly.
Pair Corralation between BTB Real and CapitaLand Investment
Assuming the 90 days horizon BTB Real Estate is expected to generate 0.35 times more return on investment than CapitaLand Investment. However, BTB Real Estate is 2.88 times less risky than CapitaLand Investment. It trades about 0.08 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.02 per unit of risk. If you would invest 192.00 in BTB Real Estate on September 3, 2024 and sell it today you would earn a total of 60.00 from holding BTB Real Estate or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.78% |
| Values | Daily Returns |
BTB Real Estate vs. CapitaLand Investment Limited
Performance |
| Timeline |
| BTB Real Estate |
| CapitaLand Investment |
BTB Real and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTB Real and CapitaLand Investment
The main advantage of trading using opposite BTB Real and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real 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.| BTB Real vs. City Office | BTB Real vs. Vornado Realty Trust | BTB Real vs. Cousins Properties Incorporated | BTB Real vs. Highwoods Properties |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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