Correlation Between CapitaLand Investment and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals, you can compare the effects of market volatilities on CapitaLand Investment and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Cumberland Pharmaceuticals.
Diversification Opportunities for CapitaLand Investment and Cumberland Pharmaceuticals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CapitaLand and Cumberland is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Cumberland Pharmaceuticals
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.99 times more return on investment than Cumberland Pharmaceuticals. However, CapitaLand Investment Limited is 1.01 times less risky than Cumberland Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Cumberland Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 192.00 in CapitaLand Investment Limited on September 1, 2024 and sell it today you would lose (10.00) from holding CapitaLand Investment Limited or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| CapitaLand Investment |
| Cumberland Pharmaceuticals |
CapitaLand Investment and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Cumberland Pharmaceuticals
The main advantage of trading using opposite CapitaLand Investment and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. New York City |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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