Correlation Between COMPUTERSHARE and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both COMPUTERSHARE 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 COMPUTERSHARE and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMPUTERSHARE and CapitaLand Investment Limited, you can compare the effects of market volatilities on COMPUTERSHARE 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 COMPUTERSHARE with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMPUTERSHARE and CapitaLand Investment.
Diversification Opportunities for COMPUTERSHARE and CapitaLand Investment
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COMPUTERSHARE and CapitaLand is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE i.e., COMPUTERSHARE and CapitaLand Investment go up and down completely randomly.
Pair Corralation between COMPUTERSHARE and CapitaLand Investment
Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 1.02 times more return on investment than CapitaLand Investment. However, COMPUTERSHARE is 1.02 times more volatile than CapitaLand Investment Limited. It trades about 0.05 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 1,423 in COMPUTERSHARE on August 31, 2024 and sell it today you would earn a total of 527.00 from holding COMPUTERSHARE or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
COMPUTERSHARE vs. CapitaLand Investment Limited
Performance |
| Timeline |
| COMPUTERSHARE |
| CapitaLand Investment |
COMPUTERSHARE and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMPUTERSHARE and CapitaLand Investment
The main advantage of trading using opposite COMPUTERSHARE and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMPUTERSHARE 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.| COMPUTERSHARE vs. CapitaLand Investment Limited | COMPUTERSHARE vs. DIVERSIFIED ROYALTY | COMPUTERSHARE vs. SLR Investment Corp | COMPUTERSHARE vs. Reinsurance Group of |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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