Correlation Between WI LAN and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both WI LAN 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 WI LAN and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WI LAN and CapitaLand Investment Limited, you can compare the effects of market volatilities on WI LAN 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 WI LAN with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WI LAN and CapitaLand Investment.
Diversification Opportunities for WI LAN and CapitaLand Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WJL and CapitaLand is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding WI LAN and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and WI LAN 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 WI LAN 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 WI LAN i.e., WI LAN and CapitaLand Investment go up and down completely randomly.
Pair Corralation between WI LAN and CapitaLand Investment
Assuming the 90 days trading horizon WI LAN is expected to generate 3.87 times less return on investment than CapitaLand Investment. In addition to that, WI LAN is 1.72 times more volatile than CapitaLand Investment Limited. It trades about 0.01 of its total potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.05 per unit of volatility. If you would invest 177.00 in CapitaLand Investment Limited on September 5, 2024 and sell it today you would earn a total of 16.00 from holding CapitaLand Investment Limited or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WI LAN vs. CapitaLand Investment Limited
Performance |
| Timeline |
| WI LAN |
| CapitaLand Investment |
WI LAN and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WI LAN and CapitaLand Investment
The main advantage of trading using opposite WI LAN and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WI LAN 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.| WI LAN vs. CapitaLand Investment Limited | WI LAN vs. Hemisphere Energy Corp | WI LAN vs. Virtus Investment Partners | WI LAN vs. PennantPark Investment |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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