Correlation Between Sunzen Biotech and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech 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 Sunzen Biotech and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunzen Biotech Bhd and Lyc Healthcare Bhd, you can compare the effects of market volatilities on Sunzen Biotech 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 Sunzen Biotech with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Lyc Healthcare.
Diversification Opportunities for Sunzen Biotech and Lyc Healthcare
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunzen and Lyc is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech i.e., Sunzen Biotech and Lyc Healthcare go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Lyc Healthcare
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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Lyc Healthcare Bhd
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Lyc Healthcare Bhd |
Sunzen Biotech and Lyc Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Lyc Healthcare
The main advantage of trading using opposite Sunzen Biotech and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech 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.The idea behind Sunzen Biotech Bhd and Lyc Healthcare Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lyc Healthcare vs. Digistar Bhd | Lyc Healthcare vs. Minetech Resources Bhd | Lyc Healthcare vs. OpenSys M Bhd | Lyc Healthcare vs. Insas 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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