Correlation Between CapitaLand Investment and DELHAIZE

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

Diversification Opportunities for CapitaLand Investment and DELHAIZE

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between CapitaLand and DELHAIZE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and DELHAIZE GROUP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELHAIZE GROUP SA 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 DELHAIZE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELHAIZE GROUP SA has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and DELHAIZE go up and down completely randomly.

Pair Corralation between CapitaLand Investment and DELHAIZE

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 3.29 times more return on investment than DELHAIZE. However, CapitaLand Investment is 3.29 times more volatile than DELHAIZE GROUP SA. It trades about 0.02 of its potential returns per unit of risk. DELHAIZE GROUP SA is currently generating about 0.02 per unit of risk. If you would invest  193.00  in CapitaLand Investment Limited on September 4, 2024 and sell it today you would lose (11.00) from holding CapitaLand Investment Limited or give up 5.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy29.96%
ValuesDaily Returns

CapitaLand Investment Limited  vs.  DELHAIZE GROUP SA

 Performance 
       Timeline  
CapitaLand Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
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.
DELHAIZE GROUP SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DELHAIZE GROUP SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DELHAIZE GROUP SA investors.

CapitaLand Investment and DELHAIZE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CapitaLand Investment and DELHAIZE

The main advantage of trading using opposite CapitaLand Investment and DELHAIZE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, DELHAIZE 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 DELHAIZE will offset losses from the drop in DELHAIZE's long position.
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The idea behind CapitaLand Investment Limited and DELHAIZE GROUP SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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