Correlation Between CapitaLand Integrated and National Retail
Can any of the company-specific risk be diversified away by investing in both CapitaLand Integrated and National Retail 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 Integrated and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapitaLand Integrated Commercial and National Retail Properties, you can compare the effects of market volatilities on CapitaLand Integrated and National Retail 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 Integrated with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Integrated and National Retail.
Diversification Opportunities for CapitaLand Integrated and National Retail
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CapitaLand and National is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Integrated Commerci and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop and CapitaLand Integrated 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 Integrated Commercial are associated (or correlated) with National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of CapitaLand Integrated i.e., CapitaLand Integrated and National Retail go up and down completely randomly.
Pair Corralation between CapitaLand Integrated and National Retail
Assuming the 90 days horizon CapitaLand Integrated Commercial is expected to generate 2.65 times more return on investment than National Retail. However, CapitaLand Integrated is 2.65 times more volatile than National Retail Properties. It trades about 0.23 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.04 per unit of risk. If you would invest 129.00 in CapitaLand Integrated Commercial on October 20, 2024 and sell it today you would earn a total of 20.00 from holding CapitaLand Integrated Commercial or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Integrated Commerci vs. National Retail Properties
Performance |
| Timeline |
| CapitaLand Integrated |
| National Retail Prop |
CapitaLand Integrated and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Integrated and National Retail
The main advantage of trading using opposite CapitaLand Integrated and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Integrated position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| CapitaLand Integrated vs. Cedar Realty Trust | CapitaLand Integrated vs. Wheeler Real Estate | CapitaLand Integrated vs. Macerich Company | CapitaLand Integrated vs. Simon Property Group |
| National Retail vs. Acadia Realty Trust | National Retail vs. Federal Realty Investment | National Retail vs. Realty Income | National Retail vs. Whitestone REIT |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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