Correlation Between CapitaLand Investment and Eltek

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

Diversification Opportunities for CapitaLand Investment and Eltek

0.36

Correlation Coefficient

CapitaLand Investment  Eltek

Weak diversification

The 3 months correlation between CapitaLand and Eltek is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Eltek go up and down completely randomly.

Pair Corralation between CapitaLand Investment and Eltek

Assuming the 90 days horizon CapitaLand Investment is expected to generate 1.32 times less return on investment than Eltek. But when comparing it to its historical volatility, CapitaLand Investment Limited is 1.61 times less risky than Eltek. It trades about 0.15 of its potential returns per unit of risk. Eltek is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  890.00  in Eltek on May 5, 2025 and sell it today you would earn a total of  163.00  from holding Eltek or generate 18.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

CapitaLand Investment Limited  vs.  Eltek

CapitaLand Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CapitaLand Investment Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, CapitaLand Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Eltek

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Eltek disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CapitaLand Investment and Eltek

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

The idea behind CapitaLand Investment Limited and Eltek 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.