Correlation Between CapitaLand Investment and Summit Materials
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on CapitaLand Investment and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Summit Materials.
Diversification Opportunities for CapitaLand Investment and Summit Materials
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CapitaLand and Summit is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Summit Materials go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Summit Materials
Assuming the 90 days horizon CapitaLand Investment is expected to generate 1.43 times less return on investment than Summit Materials. In addition to that, CapitaLand Investment is 2.58 times more volatile than Summit Materials. It trades about 0.02 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.08 per unit of volatility. If you would invest 3,642 in Summit Materials on September 3, 2024 and sell it today you would earn a total of 1,450 from holding Summit Materials or generate 39.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Summit Materials
Performance |
| Timeline |
| CapitaLand Investment |
| Summit Materials |
CapitaLand Investment and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Summit Materials
The main advantage of trading using opposite CapitaLand Investment and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' 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 |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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