Correlation Between Centessa Pharmaceuticals and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and CapitaLand Investment 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 Centessa Pharmaceuticals and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and CapitaLand Investment Limited, you can compare the effects of market volatilities on Centessa Pharmaceuticals and CapitaLand Investment 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 Centessa Pharmaceuticals with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and CapitaLand Investment.
Diversification Opportunities for Centessa Pharmaceuticals and CapitaLand Investment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centessa and CapitaLand is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and CapitaLand Investment
Given the investment horizon of 90 days Centessa Pharmaceuticals is expected to generate 1.79 times less return on investment than CapitaLand Investment. In addition to that, Centessa Pharmaceuticals is 1.51 times more volatile than CapitaLand Investment Limited. It trades about 0.07 of its total potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.19 per unit of volatility. If you would invest 182.00 in CapitaLand Investment Limited on September 19, 2024 and sell it today you would earn a total of 17.00 from holding CapitaLand Investment Limited or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| CapitaLand Investment |
Centessa Pharmaceuticals and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and CapitaLand Investment
The main advantage of trading using opposite Centessa Pharmaceuticals and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| Centessa Pharmaceuticals vs. Puma Biotechnology | Centessa Pharmaceuticals vs. Protagonist Therapeutics |
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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 Stocks Directory module to find actively traded stocks across global markets.
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