Correlation Between CBRE Group and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both CBRE Group 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 CBRE Group and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBRE Group Class and CapitaLand Investment Limited, you can compare the effects of market volatilities on CBRE Group 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 CBRE Group with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and CapitaLand Investment.
Diversification Opportunities for CBRE Group and CapitaLand Investment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CBRE and CapitaLand is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and CBRE Group 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 CBRE Group Class 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 CBRE Group i.e., CBRE Group and CapitaLand Investment go up and down completely randomly.
Pair Corralation between CBRE Group and CapitaLand Investment
Assuming the 90 days horizon CBRE Group Class is expected to generate 1.17 times more return on investment than CapitaLand Investment. However, CBRE Group is 1.17 times more volatile than CapitaLand Investment Limited. It trades about 0.08 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 7,079 in CBRE Group Class on September 2, 2024 and sell it today you would earn a total of 6,121 from holding CBRE Group Class or generate 86.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CBRE Group Class vs. CapitaLand Investment Limited
Performance |
Timeline |
CBRE Group Class |
CapitaLand Investment |
CBRE Group and CapitaLand Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CBRE Group and CapitaLand Investment
The main advantage of trading using opposite CBRE Group and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBRE Group 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.CBRE Group vs. Strategic Investments AS | CBRE Group vs. Elmos Semiconductor SE | CBRE Group vs. Tower Semiconductor | CBRE Group vs. Magnachip Semiconductor |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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