Correlation Between CapitaLand Investment and One Gas

Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and One Gas 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 One Gas 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 One Gas, you can compare the effects of market volatilities on CapitaLand Investment and One Gas 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 One Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and One Gas.

Diversification Opportunities for CapitaLand Investment and One Gas

-0.36

Correlation Coefficient

CapitaLand Investment  One Gas

Very good diversification

The 3 months correlation between CapitaLand and One is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas 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 One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and One Gas go up and down completely randomly.

Pair Corralation between CapitaLand Investment and One Gas

Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the One Gas. In addition to that, CapitaLand Investment is 1.9 times more volatile than One Gas. It trades about -0.07 of its total potential returns per unit of risk. One Gas is currently generating about 0.13 per unit of volatility. If you would invest  6,948  in One Gas on September 4, 2024 and sell it today you would earn a total of  730.00  from holding One Gas or generate 10.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CapitaLand Investment Limited  vs.  One Gas

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 latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

One Gas

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One Gas are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, One Gas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CapitaLand Investment and One Gas

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

The idea behind CapitaLand Investment Limited and One Gas 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.