Correlation Between Teleflex Incorporated and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated 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 Teleflex Incorporated and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and CapitaLand Investment Limited, you can compare the effects of market volatilities on Teleflex Incorporated 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 Teleflex Incorporated with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and CapitaLand Investment.
Diversification Opportunities for Teleflex Incorporated and CapitaLand Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Teleflex and CapitaLand is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated i.e., Teleflex Incorporated and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and CapitaLand Investment
Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the CapitaLand Investment. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.8 times less risky than CapitaLand Investment. The stock trades about -0.32 of its potential returns per unit of risk. The CapitaLand Investment Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 182.00 in CapitaLand Investment Limited on September 19, 2024 and sell it today you would earn a total of 17.00 from holding CapitaLand Investment Limited or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleflex Incorporated vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Teleflex Incorporated |
| CapitaLand Investment |
Teleflex Incorporated and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and CapitaLand Investment
The main advantage of trading using opposite Teleflex Incorporated and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated 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.| Teleflex Incorporated vs. Avita Medical | Teleflex Incorporated vs. Inogen Inc | Teleflex Incorporated vs. Apyx Medical |
| CapitaLand Investment vs. Asia Pptys | CapitaLand Investment vs. Adler Group SA | CapitaLand Investment vs. Ambase Corp | CapitaLand Investment vs. Bridgemarq 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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