Correlation Between Charter Communications and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and CapitaLand Investment Limited, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and CapitaLand Investment.
Diversification Opportunities for Charter Communications and CapitaLand Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and CapitaLand is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Charter Communications and CapitaLand Investment
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.4 times more return on investment than CapitaLand Investment. However, Charter Communications is 1.4 times more volatile than CapitaLand Investment Limited. It trades about 0.02 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.01 per unit of risk. If you would invest 31,510 in Charter Communications on December 2, 2024 and sell it today you would earn a total of 2,975 from holding Charter Communications or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Charter Communications |
| CapitaLand Investment |
Charter Communications and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and CapitaLand Investment
The main advantage of trading using opposite Charter Communications and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.| Charter Communications vs. EPSILON HEALTHCARE LTD | Charter Communications vs. Fast Retailing Co | Charter Communications vs. MARKET VECTR RETAIL | Charter Communications vs. COMM HEALTH SYSTEMS |
| CapitaLand Investment vs. Firan Technology Group | CapitaLand Investment vs. Verizon Communications | CapitaLand Investment vs. China Telecom | CapitaLand Investment vs. Cognizant Technology Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |