Correlation Between Insteel Industries and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Insteel Industries 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 Insteel Industries and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and CapitaLand Investment Limited, you can compare the effects of market volatilities on Insteel Industries 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 Insteel Industries with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and CapitaLand Investment.
Diversification Opportunities for Insteel Industries and CapitaLand Investment
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Insteel and CapitaLand is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Insteel Industries 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 Insteel Industries 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 Insteel Industries i.e., Insteel Industries and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Insteel Industries and CapitaLand Investment
Given the investment horizon of 90 days Insteel Industries is expected to generate 1.1 times less return on investment than CapitaLand Investment. But when comparing it to its historical volatility, Insteel Industries is 2.06 times less risky than CapitaLand Investment. It trades about 0.02 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 231.00 in CapitaLand Investment Limited on September 4, 2024 and sell it today you would lose (49.00) from holding CapitaLand Investment Limited or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Insteel Industries vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Insteel Industries |
| CapitaLand Investment |
Insteel Industries and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and CapitaLand Investment
The main advantage of trading using opposite Insteel Industries and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries 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.| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |