Correlation Between CapitaLand Investment and 126650DF4

Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and 126650DF4 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 126650DF4 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 CVS HEALTH P, you can compare the effects of market volatilities on CapitaLand Investment and 126650DF4 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 126650DF4. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and 126650DF4.

Diversification Opportunities for CapitaLand Investment and 126650DF4

0.11

Correlation Coefficient

CapitaLand Investment  126650DF4

Average diversification

The 3 months correlation between CapitaLand and 126650DF4 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and CVS HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH P 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 126650DF4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH P has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and 126650DF4 go up and down completely randomly.

Pair Corralation between CapitaLand Investment and 126650DF4

Assuming the 90 days horizon CapitaLand Investment Limited is expected to under-perform the 126650DF4. In addition to that, CapitaLand Investment is 5.83 times more volatile than CVS HEALTH P. It trades about -0.04 of its total potential returns per unit of risk. CVS HEALTH P is currently generating about 0.01 per unit of volatility. If you would invest  9,720  in CVS HEALTH P on December 4, 2024 and sell it today you would earn a total of  32.00  from holding CVS HEALTH P or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

CapitaLand Investment Limited  vs.  CVS HEALTH P

CapitaLand Investment

Risk-Adjusted Performance

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.

CVS HEALTH P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVS HEALTH P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 126650DF4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CapitaLand Investment and 126650DF4

The main advantage of trading using opposite CapitaLand Investment and 126650DF4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment position performs unexpectedly, 126650DF4 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 126650DF4 will offset losses from the drop in 126650DF4's long position.

The idea behind CapitaLand Investment Limited and CVS HEALTH P 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.