Correlation Between DC HEALTHCARE and Greatech Technology
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Greatech Technology 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 DC HEALTHCARE and Greatech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DC HEALTHCARE HOLDINGS and Greatech Technology Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and Greatech Technology 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 DC HEALTHCARE with a short position of Greatech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Greatech Technology.
Diversification Opportunities for DC HEALTHCARE and Greatech Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0283 and Greatech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology Bhd and DC 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 DC HEALTHCARE HOLDINGS are associated (or correlated) with Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Greatech Technology go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Greatech Technology
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 3.29 times more return on investment than Greatech Technology. However, DC HEALTHCARE is 3.29 times more volatile than Greatech Technology Bhd. It trades about 0.1 of its potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.1 per unit of risk. If you would invest 17.00 in DC HEALTHCARE HOLDINGS on October 16, 2024 and sell it today you would earn a total of 1.00 from holding DC HEALTHCARE HOLDINGS or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Greatech Technology Bhd
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Greatech Technology Bhd |
DC HEALTHCARE and Greatech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Greatech Technology
The main advantage of trading using opposite DC HEALTHCARE and Greatech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Greatech Technology 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 Greatech Technology will offset losses from the drop in Greatech Technology's long position.| DC HEALTHCARE vs. Malayan Banking Bhd | DC HEALTHCARE vs. Public Bank Bhd | DC HEALTHCARE vs. Petronas Chemicals Group | DC HEALTHCARE vs. Tenaga Nasional Bhd |
| Greatech Technology vs. DC HEALTHCARE HOLDINGS | Greatech Technology vs. Diversified Gateway Solutions | Greatech Technology vs. Southern Steel Bhd | Greatech Technology vs. PIE Industrial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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