Correlation Between CapitaLand Investment and SLR Investment

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

Diversification Opportunities for CapitaLand Investment and SLR Investment

0.11

Correlation Coefficient

CapitaLand Investment  SLR Investment

Average diversification

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

Pair Corralation between CapitaLand Investment and SLR Investment

Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 1.54 times more return on investment than SLR Investment. However, CapitaLand Investment is 1.54 times more volatile than SLR Investment Corp. It trades about 0.09 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.1 per unit of risk. If you would invest  172.00  in CapitaLand Investment Limited on May 1, 2025 and sell it today you would earn a total of  14.00  from holding CapitaLand Investment Limited or generate 8.14% return on investment over 90 days.

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

CapitaLand Investment Limited  vs.  SLR Investment Corp

CapitaLand Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CapitaLand Investment Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CapitaLand Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SLR Investment Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SLR Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CapitaLand Investment and SLR Investment

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

The idea behind CapitaLand Investment Limited and SLR Investment Corp 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.