Correlation Between 694308KC0 and CapitaLand Investment

Can any of the company-specific risk be diversified away by investing in both 694308KC0 and CapitaLand 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 694308KC0 and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCG 44 01 MAR 32 and CapitaLand Investment Limited, you can compare the effects of market volatilities on 694308KC0 and CapitaLand 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 694308KC0 with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of 694308KC0 and CapitaLand Investment.

Diversification Opportunities for 694308KC0 and CapitaLand Investment

0.22

Correlation Coefficient

694308KC0  CapitaLand Investment

Modest diversification

The 3 months correlation between 694308KC0 and CapitaLand is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PCG 44 01 MAR 32 and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and 694308KC0 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 PCG 44 01 MAR 32 are associated (or correlated) with CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of 694308KC0 i.e., 694308KC0 and CapitaLand Investment go up and down completely randomly.

Pair Corralation between 694308KC0 and CapitaLand Investment

Assuming the 90 days trading horizon PCG 44 01 MAR 32 is expected to generate 0.43 times more return on investment than CapitaLand Investment. However, PCG 44 01 MAR 32 is 2.32 times less risky than CapitaLand Investment. It trades about -0.02 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.13 per unit of risk. If you would invest  9,619  in PCG 44 01 MAR 32 on December 28, 2024 and sell it today you would lose (67.00) from holding PCG 44 01 MAR 32 or give up 0.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

PCG 44 01 MAR 32  vs.  CapitaLand Investment Limited

PCG 44 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 44 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KC0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 694308KC0 and CapitaLand Investment

The main advantage of trading using opposite 694308KC0 and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 694308KC0 position performs unexpectedly, CapitaLand 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.

The idea behind PCG 44 01 MAR 32 and CapitaLand Investment Limited 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.