Correlation Between Bill and CapitaLand Investment

Can any of the company-specific risk be diversified away by investing in both Bill 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 Bill and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bill Com Holdings and CapitaLand Investment Limited, you can compare the effects of market volatilities on Bill 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 Bill with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and CapitaLand Investment.

Diversification Opportunities for Bill and CapitaLand Investment

-0.68

Correlation Coefficient

Bill  CapitaLand Investment

Excellent diversification

The 3 months correlation between Bill and CapitaLand is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Bill 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 Bill Com Holdings 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 Bill i.e., Bill and CapitaLand Investment go up and down completely randomly.

Pair Corralation between Bill and CapitaLand Investment

Given the investment horizon of 90 days Bill Com Holdings is expected to generate 1.77 times more return on investment than CapitaLand Investment. However, Bill is 1.77 times more volatile than CapitaLand Investment Limited. It trades about 0.21 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  6,472  in Bill Com Holdings on October 7, 2024 and sell it today you would earn a total of  2,352  from holding Bill Com Holdings or generate 36.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bill Com Holdings  vs.  CapitaLand Investment Limited

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

CapitaLand Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapitaLand Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bill and CapitaLand Investment

The main advantage of trading using opposite Bill and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill 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.

The idea behind Bill Com Holdings and CapitaLand Investment Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.