Correlation Between CapitaLand Investment and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies, you can compare the effects of market volatilities on CapitaLand Investment and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Minerals Technologies.
Diversification Opportunities for CapitaLand Investment and Minerals Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CapitaLand and Minerals is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Minerals Technologies go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Minerals Technologies
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 1.95 times more return on investment than Minerals Technologies. However, CapitaLand Investment is 1.95 times more volatile than Minerals Technologies. It trades about -0.04 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.22 per unit of risk. If you would invest 182.00 in CapitaLand Investment Limited on December 3, 2024 and sell it today you would lose (15.00) from holding CapitaLand Investment Limited or give up 8.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
CapitaLand Investment Limited vs. Minerals Technologies
Performance |
Timeline |
CapitaLand Investment |
Minerals Technologies |
CapitaLand Investment and Minerals Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CapitaLand Investment and Minerals Technologies
The main advantage of trading using opposite CapitaLand Investment and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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