Correlation Between CapitaLand Investment and 06051GFC8

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Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and 06051GFC8 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 06051GFC8 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 BANK AMER P, you can compare the effects of market volatilities on CapitaLand Investment and 06051GFC8 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 06051GFC8. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and 06051GFC8.

Diversification Opportunities for CapitaLand Investment and 06051GFC8

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between CapitaLand and 06051GFC8 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and BANK AMER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK AMER P 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 06051GFC8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK AMER P has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and 06051GFC8 go up and down completely randomly.

Pair Corralation between CapitaLand Investment and 06051GFC8

Assuming the 90 days horizon CapitaLand Investment is expected to generate 1.02 times less return on investment than 06051GFC8. In addition to that, CapitaLand Investment is 3.5 times more volatile than BANK AMER P. It trades about 0.0 of its total potential returns per unit of risk. BANK AMER P is currently generating about 0.02 per unit of volatility. If you would invest  9,549  in BANK AMER P on September 5, 2024 and sell it today you would earn a total of  140.00  from holding BANK AMER P or generate 1.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.19%
ValuesDaily Returns

CapitaLand Investment Limited  vs.  BANK AMER P

 Performance 
       Timeline  
CapitaLand Investment 

Risk-Adjusted Performance

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Over the last 90 days CapitaLand Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
BANK AMER P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BANK AMER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 06051GFC8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CapitaLand Investment and 06051GFC8 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CapitaLand Investment and 06051GFC8

The main advantage of trading using opposite CapitaLand Investment and 06051GFC8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, 06051GFC8 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 06051GFC8 will offset losses from the drop in 06051GFC8's long position.
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The idea behind CapitaLand Investment Limited and BANK AMER P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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