Correlation Between CapitaLand Investment and National CineMedia
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on CapitaLand Investment and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and National CineMedia.
Diversification Opportunities for CapitaLand Investment and National CineMedia
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CapitaLand and National is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and National CineMedia go up and down completely randomly.
Pair Corralation between CapitaLand Investment and National CineMedia
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.18 times more return on investment than National CineMedia. However, CapitaLand Investment Limited is 5.43 times less risky than National CineMedia. It trades about -0.22 of its potential returns per unit of risk. National CineMedia is currently generating about -0.22 per unit of risk. If you would invest 202.00 in CapitaLand Investment Limited on October 7, 2024 and sell it today you would lose (3.00) from holding CapitaLand Investment Limited or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. National CineMedia
Performance |
| Timeline |
| CapitaLand Investment |
| National CineMedia |
CapitaLand Investment and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and National CineMedia
The main advantage of trading using opposite CapitaLand Investment and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia'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 |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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