Correlation Between CapitaLand Investment and Micromobility

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

Diversification Opportunities for CapitaLand Investment and Micromobility

0.54

Correlation Coefficient

CapitaLand Investment  Micromobility

Very weak diversification

The 3 months correlation between CapitaLand and Micromobility is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Micromobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micromobility 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 Micromobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micromobility has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Micromobility go up and down completely randomly.

Pair Corralation between CapitaLand Investment and Micromobility

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 0.33 times more return on investment than Micromobility. However, CapitaLand Investment Limited is 3.02 times less risky than Micromobility. It trades about 0.02 of its potential returns per unit of risk. Micromobility is currently generating about -0.15 per unit of risk. If you would invest  227.00  in CapitaLand Investment Limited on September 18, 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	28.89%
Values	Daily Returns

CapitaLand Investment Limited  vs.  Micromobility

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 nearly stable essential indicators, CapitaLand Investment is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Micromobility is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CapitaLand Investment and Micromobility

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

The idea behind CapitaLand Investment Limited and Micromobility 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.