Correlation Between DC HEALTHCARE and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Malayan Banking 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 Malayan Banking 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 Malayan Banking Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and Malayan Banking 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 Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Malayan Banking.
Diversification Opportunities for DC HEALTHCARE and Malayan Banking
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 0283 and Malayan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking 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 Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Malayan Banking go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Malayan Banking
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 203.57 times more return on investment than Malayan Banking. However, DC HEALTHCARE is 203.57 times more volatile than Malayan Banking Bhd. It trades about 0.11 of its potential returns per unit of risk. Malayan Banking Bhd is currently generating about 0.1 per unit of risk. If you would invest 45.00 in DC HEALTHCARE HOLDINGS on August 30, 2024 and sell it today you would lose (28.00) from holding DC HEALTHCARE HOLDINGS or give up 62.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.49% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Malayan Banking Bhd
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Malayan Banking Bhd |
DC HEALTHCARE and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Malayan Banking
The main advantage of trading using opposite DC HEALTHCARE and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| DC HEALTHCARE vs. Eversafe Rubber Bhd | DC HEALTHCARE vs. Riverview Rubber Estates | DC HEALTHCARE vs. BP Plastics Holding | DC HEALTHCARE vs. FARM FRESH BERHAD |
| Malayan Banking vs. PIE Industrial Bhd | Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Binasat Communications Bhd | Malayan Banking vs. Choo Bee Metal |
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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