Correlation Between Lyc Healthcare and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Lyc Healthcare and PIE Industrial 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 PIE Industrial 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 PIE Industrial Bhd, you can compare the effects of market volatilities on Lyc Healthcare and PIE Industrial 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyc Healthcare and PIE Industrial.
Diversification Opportunities for Lyc Healthcare and PIE Industrial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyc and PIE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lyc Healthcare Bhd and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Lyc Healthcare i.e., Lyc Healthcare and PIE Industrial go up and down completely randomly.
Pair Corralation between Lyc Healthcare and PIE Industrial
Assuming the 90 days trading horizon Lyc Healthcare Bhd is expected to generate 2.05 times more return on investment than PIE Industrial. However, Lyc Healthcare is 2.05 times more volatile than PIE Industrial Bhd. It trades about 0.02 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about -0.21 per unit of risk. If you would invest 9.50 in Lyc Healthcare Bhd on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Lyc Healthcare Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyc Healthcare Bhd vs. PIE Industrial Bhd
Performance |
| Timeline |
| Lyc Healthcare Bhd |
| PIE Industrial Bhd |
Lyc Healthcare and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyc Healthcare and PIE Industrial
The main advantage of trading using opposite Lyc Healthcare and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyc Healthcare position performs unexpectedly, PIE Industrial 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| Lyc Healthcare vs. Choo Bee Metal | Lyc Healthcare vs. YX Precious Metals | Lyc Healthcare vs. Kossan Rubber Industries | Lyc Healthcare vs. Cengild Medical Berhad |
| PIE Industrial vs. Steel Hawk Berhad | PIE Industrial vs. Impiana Hotels Bhd | PIE Industrial vs. Lotte Chemical Titan | PIE Industrial vs. FARM FRESH BERHAD |
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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