Correlation Between Digistar Bhd and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Lyc Healthcare 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 Digistar Bhd and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Lyc Healthcare Bhd, you can compare the effects of market volatilities on Digistar Bhd and Lyc Healthcare 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 Digistar Bhd with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Lyc Healthcare.
Diversification Opportunities for Digistar Bhd and Lyc Healthcare
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digistar and Lyc is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Lyc Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyc Healthcare Bhd and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with Lyc Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyc Healthcare Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Lyc Healthcare go up and down completely randomly.
Pair Corralation between Digistar Bhd and Lyc Healthcare
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 1.38 times more return on investment than Lyc Healthcare. However, Digistar Bhd is 1.38 times more volatile than Lyc Healthcare Bhd. It trades about 0.01 of its potential returns per unit of risk. Lyc Healthcare Bhd is currently generating about -0.04 per unit of risk. If you would invest 8.50 in Digistar Bhd on November 19, 2024 and sell it today you would lose (3.50) from holding Digistar Bhd or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. Lyc Healthcare Bhd
Performance |
| Timeline |
| Digistar Bhd |
| Lyc Healthcare Bhd |
Digistar Bhd and Lyc Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Lyc Healthcare
The main advantage of trading using opposite Digistar Bhd and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Lyc Healthcare 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 Lyc Healthcare will offset losses from the drop in Lyc Healthcare's long position.| Digistar Bhd vs. Cosmos Technology International | Digistar Bhd vs. Choo Bee Metal | Digistar Bhd vs. Central Industrial Corp | Digistar Bhd vs. Carlsberg Brewery Malaysia |
| Lyc Healthcare vs. Cloudpoint Technology Berhad | Lyc Healthcare vs. PMB Technology Bhd | Lyc Healthcare vs. Carlsberg Brewery Malaysia | Lyc Healthcare vs. RHB Bank Bhd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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