Correlation Between CapitaLand Investment and Freeport

Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment and Freeport 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 Freeport 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 Freeport McMoRan 4125 percent, you can compare the effects of market volatilities on CapitaLand Investment and Freeport 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 Freeport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Freeport.

Diversification Opportunities for CapitaLand Investment and Freeport

0.56

Correlation Coefficient

CapitaLand Investment  Freeport

Very weak diversification

The 3 months correlation between CapitaLand and Freeport is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Freeport McMoRan 4125 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan 4125 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 Freeport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan 4125 has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Freeport go up and down completely randomly.

Pair Corralation between CapitaLand Investment and Freeport

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 6.04 times more return on investment than Freeport. However, CapitaLand Investment is 6.04 times more volatile than Freeport McMoRan 4125 percent. It trades about 0.02 of its potential returns per unit of risk. Freeport McMoRan 4125 percent is currently generating about 0.02 per unit of risk. If you would invest  227.00  in CapitaLand Investment Limited on September 20, 2024 and sell it today you would lose (28.00) from holding CapitaLand Investment Limited or give up 12.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.98%
Values	Daily Returns

CapitaLand Investment Limited  vs.  Freeport McMoRan 4125 percent

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 weak 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.

Freeport McMoRan 4125

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeport McMoRan 4125 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Freeport 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 Freeport

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

The idea behind CapitaLand Investment Limited and Freeport McMoRan 4125 percent 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.