Correlation Between CapitaLand Investment and Steven Madden
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Steven Madden 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 Steven Madden 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 Steven Madden, you can compare the effects of market volatilities on CapitaLand Investment and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Steven Madden.
Diversification Opportunities for CapitaLand Investment and Steven Madden
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CapitaLand and Steven is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Steven Madden go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Steven Madden
Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the Steven Madden. But the pink sheet apears to be less risky and, when comparing its historical volatility, CapitaLand Investment Limited is 1.01 times less risky than Steven Madden. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Steven Madden is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,497 in Steven Madden on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Steven Madden or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Steven Madden
Performance |
| Timeline |
| CapitaLand Investment |
| Steven Madden |
CapitaLand Investment and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Steven Madden
The main advantage of trading using opposite CapitaLand Investment and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden's 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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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