Correlation Between Lyc Healthcare and Sunway Construction
Can any of the company-specific risk be diversified away by investing in both Lyc Healthcare and Sunway Construction 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 Sunway Construction 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 Sunway Construction Group, you can compare the effects of market volatilities on Lyc Healthcare and Sunway Construction 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 Sunway Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyc Healthcare and Sunway Construction.
Diversification Opportunities for Lyc Healthcare and Sunway Construction
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyc and Sunway is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lyc Healthcare Bhd and Sunway Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway Construction 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 Sunway Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Construction has no effect on the direction of Lyc Healthcare i.e., Lyc Healthcare and Sunway Construction go up and down completely randomly.
Pair Corralation between Lyc Healthcare and Sunway Construction
Assuming the 90 days trading horizon Lyc Healthcare Bhd is expected to generate 2.26 times more return on investment than Sunway Construction. However, Lyc Healthcare is 2.26 times more volatile than Sunway Construction Group. It trades about 0.07 of its potential returns per unit of risk. Sunway Construction Group is currently generating about -0.02 per unit of risk. If you would invest 8.50 in Lyc Healthcare Bhd on August 30, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyc Healthcare Bhd vs. Sunway Construction Group
Performance |
| Timeline |
| Lyc Healthcare Bhd |
| Sunway Construction |
Lyc Healthcare and Sunway Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyc Healthcare and Sunway Construction
The main advantage of trading using opposite Lyc Healthcare and Sunway Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyc Healthcare position performs unexpectedly, Sunway Construction 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 Sunway Construction will offset losses from the drop in Sunway Construction's long position.| Lyc Healthcare vs. Carlsberg Brewery Malaysia | Lyc Healthcare vs. Kluang Rubber | Lyc Healthcare vs. Daya Materials Bhd | Lyc Healthcare vs. DC HEALTHCARE HOLDINGS |
| Sunway Construction vs. K One Technology Bhd | Sunway Construction vs. PMB Technology Bhd | Sunway Construction vs. Homeritz Bhd | Sunway Construction vs. Binasat Communications 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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