Correlation Between Lyc Healthcare and Insas Bhd
Can any of the company-specific risk be diversified away by investing in both Lyc Healthcare and Insas Bhd 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 Lyc Healthcare and Insas Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyc Healthcare Bhd and Insas Bhd, you can compare the effects of market volatilities on Lyc Healthcare and Insas Bhd 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 Lyc Healthcare with a short position of Insas Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyc Healthcare and Insas Bhd.
Diversification Opportunities for Lyc Healthcare and Insas Bhd
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lyc and Insas is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lyc Healthcare Bhd and Insas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insas Bhd and Lyc Healthcare 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 Lyc Healthcare Bhd are associated (or correlated) with Insas Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insas Bhd has no effect on the direction of Lyc Healthcare i.e., Lyc Healthcare and Insas Bhd go up and down completely randomly.
Pair Corralation between Lyc Healthcare and Insas Bhd
Assuming the 90 days trading horizon Lyc Healthcare Bhd is expected to generate 3.79 times more return on investment than Insas Bhd. However, Lyc Healthcare is 3.79 times more volatile than Insas Bhd. It trades about 0.08 of its potential returns per unit of risk. Insas Bhd is currently generating about -0.24 per unit of risk. If you would invest 8.50 in Lyc Healthcare Bhd on August 27, 2024 and sell it today you would earn a total of 0.50 from holding Lyc Healthcare Bhd or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyc Healthcare Bhd vs. Insas Bhd
Performance |
| Timeline |
| Lyc Healthcare Bhd |
| Insas Bhd |
Lyc Healthcare and Insas Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyc Healthcare and Insas Bhd
The main advantage of trading using opposite Lyc Healthcare and Insas Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyc Healthcare position performs unexpectedly, Insas Bhd 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 Insas Bhd will offset losses from the drop in Insas Bhd's long position.| Lyc Healthcare vs. Digistar Bhd | Lyc Healthcare vs. Minetech Resources Bhd | Lyc Healthcare vs. OpenSys M Bhd | Lyc Healthcare vs. Insas Bhd |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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