Correlation Between Site Centers and CapitaLand Integrated

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

By analyzing existing cross correlation between Site Centers Corp and CapitaLand Integrated Commercial, you can compare the effects of market volatilities on Site Centers and CapitaLand Integrated 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 Site Centers with a short position of CapitaLand Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Site Centers and CapitaLand Integrated.

Diversification Opportunities for Site Centers and CapitaLand Integrated

-0.25

Correlation Coefficient

Site Centers  CapitaLand Integrated

Very good diversification

The 3 months correlation between Site and CapitaLand is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Site Centers Corp and CapitaLand Integrated Commerci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Integrated and Site Centers 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 Site Centers Corp are associated (or correlated) with CapitaLand Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Integrated has no effect on the direction of Site Centers i.e., Site Centers and CapitaLand Integrated go up and down completely randomly.

Pair Corralation between Site Centers and CapitaLand Integrated

Given the investment horizon of 90 days Site Centers Corp is expected to generate 1.51 times more return on investment than CapitaLand Integrated. However, Site Centers is 1.51 times more volatile than CapitaLand Integrated Commercial. It trades about 0.11 of its potential returns per unit of risk. CapitaLand Integrated Commercial is currently generating about -0.03 per unit of risk. If you would invest  1,118  in Site Centers Corp on September 10, 2024 and sell it today you would earn a total of  416.00  from holding Site Centers Corp or generate 37.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Site Centers Corp  vs.  CapitaLand Integrated Commerci

Site Centers Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Site Centers exhibited solid returns over the last few months and may actually be approaching a breakup point.

CapitaLand Integrated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapitaLand Integrated Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Site Centers and CapitaLand Integrated

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

The idea behind Site Centers Corp and CapitaLand Integrated Commercial 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.