Correlation Between CapitaLand Investment and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Cheniere Energy 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 Cheniere Energy 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 Cheniere Energy Partners, you can compare the effects of market volatilities on CapitaLand Investment and Cheniere Energy 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 Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Cheniere Energy.
Diversification Opportunities for CapitaLand Investment and Cheniere Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CapitaLand and Cheniere is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners 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 Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Cheniere Energy go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Cheniere Energy
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 3.24 times more return on investment than Cheniere Energy. However, CapitaLand Investment is 3.24 times more volatile than Cheniere Energy Partners. It trades about 0.02 of its potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.04 per unit of risk. If you would invest 217.00 in CapitaLand Investment Limited on August 29, 2024 and sell it today you would lose (35.00) from holding CapitaLand Investment Limited or give up 16.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Cheniere Energy Partners
Performance |
| Timeline |
| CapitaLand Investment |
| Cheniere Energy Partners |
CapitaLand Investment and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Cheniere Energy
The main advantage of trading using opposite CapitaLand Investment and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
| Cheniere Energy vs. Antero Midstream Partners | Cheniere Energy vs. Excelerate Energy | Cheniere Energy vs. Energy Transfer LP | Cheniere Energy vs. Teekay |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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