Correlation Between CapitaLand Investment and Globalink Investment

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

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

Diversification Opportunities for CapitaLand Investment and Globalink Investment

-0.18

Correlation Coefficient

CapitaLand Investment  Globalink Investment

Good diversification

The 3 months correlation between CapitaLand and Globalink is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Globalink Investment Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment Unit and CapitaLand Investment 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 CapitaLand Investment Limited are associated (or correlated) with Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment Unit has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Globalink Investment go up and down completely randomly.

Pair Corralation between CapitaLand Investment and Globalink Investment

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 1.55 times more return on investment than Globalink Investment. However, CapitaLand Investment is 1.55 times more volatile than Globalink Investment Unit. It trades about 0.03 of its potential returns per unit of risk. Globalink Investment Unit is currently generating about 0.01 per unit of risk. If you would invest  194.00  in CapitaLand Investment Limited on September 23, 2024 and sell it today you would earn a total of  5.00  from holding CapitaLand Investment Limited or generate 2.58% return on investment over 90 days.

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

CapitaLand Investment Limited  vs.  Globalink Investment Unit

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Globalink Investment Unit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globalink Investment Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CapitaLand Investment and Globalink Investment

The main advantage of trading using opposite CapitaLand Investment and Globalink Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Globalink 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 Globalink Investment will offset losses from the drop in Globalink Investment's long position.

The idea behind CapitaLand Investment Limited and Globalink Investment Unit 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.