Correlation Between DC HEALTHCARE and MI Technovation
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and MI Technovation.
Diversification Opportunities for DC HEALTHCARE and MI Technovation
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0283 and 5286 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and MI Technovation go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and MI Technovation
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to under-perform the MI Technovation. In addition to that, DC HEALTHCARE is 1.24 times more volatile than MI Technovation Bhd. It trades about -0.01 of its total potential returns per unit of risk. MI Technovation Bhd is currently generating about 0.05 per unit of volatility. If you would invest 200.00 in MI Technovation Bhd on August 31, 2024 and sell it today you would earn a total of 12.00 from holding MI Technovation Bhd or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. MI Technovation Bhd
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| MI Technovation Bhd |
DC HEALTHCARE and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and MI Technovation
The main advantage of trading using opposite DC HEALTHCARE and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| DC HEALTHCARE vs. Cengild Medical Berhad | DC HEALTHCARE vs. Kossan Rubber Industries | DC HEALTHCARE vs. YTL Hospitality REIT | DC HEALTHCARE vs. Aeon Credit Service |
| MI Technovation vs. British American Tobacco | MI Technovation vs. Hong Leong Bank | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Aeon Credit Service |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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