Correlation Between CapitaLand Investment and Kinetik Holdings
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings, you can compare the effects of market volatilities on CapitaLand Investment and Kinetik Holdings 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 Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Kinetik Holdings.
Diversification Opportunities for CapitaLand Investment and Kinetik Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CapitaLand and Kinetik is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings 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 Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Kinetik Holdings go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Kinetik Holdings
Assuming the 90 days horizon CapitaLand Investment is expected to generate 2.62 times less return on investment than Kinetik Holdings. In addition to that, CapitaLand Investment is 2.57 times more volatile than Kinetik Holdings. It trades about 0.01 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.1 per unit of volatility. If you would invest 2,809 in Kinetik Holdings on August 26, 2024 and sell it today you would earn a total of 3,356 from holding Kinetik Holdings or generate 119.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Kinetik Holdings
Performance |
| Timeline |
| CapitaLand Investment |
| Kinetik Holdings |
CapitaLand Investment and Kinetik Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Kinetik Holdings
The main advantage of trading using opposite CapitaLand Investment and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Kinetik Holdings 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 Kinetik Holdings will offset losses from the drop in Kinetik Holdings' 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 |
| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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