Correlation Between Binasat Communications and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both Binasat Communications 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 Binasat Communications and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Lyc Healthcare Bhd, you can compare the effects of market volatilities on Binasat Communications 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 Binasat Communications with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Lyc Healthcare.
Diversification Opportunities for Binasat Communications and Lyc Healthcare
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Binasat and Lyc is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications 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 Binasat Communications 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 Binasat Communications 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 Binasat Communications i.e., Binasat Communications and Lyc Healthcare go up and down completely randomly.
Pair Corralation between Binasat Communications and Lyc Healthcare
Assuming the 90 days trading horizon Binasat Communications is expected to generate 1.47 times less return on investment than Lyc Healthcare. But when comparing it to its historical volatility, Binasat Communications Bhd is 1.79 times less risky than Lyc Healthcare. It trades about 0.09 of its potential returns per unit of risk. Lyc Healthcare Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Lyc Healthcare Bhd
Performance |
| Timeline |
| Binasat Communications |
| Lyc Healthcare Bhd |
Binasat Communications and Lyc Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Lyc Healthcare
The main advantage of trading using opposite Binasat Communications and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications 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.| Binasat Communications vs. Duopharma Biotech Bhd | Binasat Communications vs. ES Ceramics Technology | Binasat Communications vs. Uchi Technologies Bhd | Binasat Communications vs. Oriental Food Industries |
| Lyc Healthcare vs. Carlsberg Brewery Malaysia | Lyc Healthcare vs. Kluang Rubber | Lyc Healthcare vs. Daya Materials Bhd | Lyc Healthcare vs. DC HEALTHCARE 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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