Correlation Between Lyc Healthcare and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both Lyc Healthcare and KPJ 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 Lyc Healthcare and KPJ Healthcare 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 KPJ Healthcare Bhd, you can compare the effects of market volatilities on Lyc Healthcare and KPJ 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 Lyc Healthcare with a short position of KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyc Healthcare and KPJ Healthcare.
Diversification Opportunities for Lyc Healthcare and KPJ Healthcare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lyc and KPJ is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lyc Healthcare Bhd and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare 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 KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of Lyc Healthcare i.e., Lyc Healthcare and KPJ Healthcare go up and down completely randomly.
Pair Corralation between Lyc Healthcare and KPJ Healthcare
Assuming the 90 days trading horizon Lyc Healthcare Bhd is expected to under-perform the KPJ Healthcare. In addition to that, Lyc Healthcare is 2.18 times more volatile than KPJ Healthcare Bhd. It trades about -0.18 of its total potential returns per unit of risk. KPJ Healthcare Bhd is currently generating about -0.14 per unit of volatility. If you would invest 235.00 in KPJ Healthcare Bhd on November 4, 2024 and sell it today you would lose (9.00) from holding KPJ Healthcare Bhd or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lyc Healthcare Bhd vs. KPJ Healthcare Bhd
Performance |
| Timeline |
| Lyc Healthcare Bhd |
| KPJ Healthcare Bhd |
Lyc Healthcare and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyc Healthcare and KPJ Healthcare
The main advantage of trading using opposite Lyc Healthcare and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyc Healthcare position performs unexpectedly, KPJ 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| Lyc Healthcare vs. Press Metal Bhd | Lyc Healthcare vs. Eonmetall Group Bhd | Lyc Healthcare vs. Cengild Medical Berhad | Lyc Healthcare vs. Farm Price Holdings |
| KPJ Healthcare vs. Senheng New Retail | KPJ Healthcare vs. Dnonce Tech Bhd | KPJ Healthcare vs. IHH Healthcare Bhd | KPJ Healthcare vs. Farm Price Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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