Correlation Between Geely Automobile and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and CapitaLand Investment Limited, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and CapitaLand Investment.
Diversification Opportunities for Geely Automobile and CapitaLand Investment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Geely and CapitaLand is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Geely Automobile and CapitaLand Investment
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the CapitaLand Investment. In addition to that, Geely Automobile is 2.15 times more volatile than CapitaLand Investment Limited. It trades about -0.1 of its total potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.1 per unit of volatility. If you would invest 193.00 in CapitaLand Investment Limited on August 31, 2024 and sell it today you would lose (6.00) from holding CapitaLand Investment Limited or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Geely Automobile Holdings |
| CapitaLand Investment |
Geely Automobile and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and CapitaLand Investment
The main advantage of trading using opposite Geely Automobile and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. NORWEGIAN AIR SHUT | Geely Automobile vs. Penta Ocean Construction Co | Geely Automobile vs. DAIRY FARM INTL | Geely Automobile vs. Ryanair Holdings plc |
| CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Wharf Real Estate | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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