Correlation Between DC HEALTHCARE and Hong Leong
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Hong Leong 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 Hong Leong 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 Hong Leong Bank, you can compare the effects of market volatilities on DC HEALTHCARE and Hong Leong 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 Hong Leong. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Hong Leong.
Diversification Opportunities for DC HEALTHCARE and Hong Leong
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0283 and Hong is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Hong Leong Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Leong Bank 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 Hong Leong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Leong Bank has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Hong Leong go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Hong Leong
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 168.45 times more return on investment than Hong Leong. However, DC HEALTHCARE is 168.45 times more volatile than Hong Leong Bank. It trades about 0.11 of its potential returns per unit of risk. Hong Leong Bank is currently generating about 0.06 per unit of risk. If you would invest 45.00 in DC HEALTHCARE HOLDINGS on September 2, 2024 and sell it today you would lose (29.00) from holding DC HEALTHCARE HOLDINGS or give up 64.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.08% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Hong Leong Bank
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Hong Leong Bank |
DC HEALTHCARE and Hong Leong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Hong Leong
The main advantage of trading using opposite DC HEALTHCARE and Hong Leong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Hong Leong 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 Hong Leong will offset losses from the drop in Hong Leong's long position.| DC HEALTHCARE vs. SSF Home Group | DC HEALTHCARE vs. Binasat Communications Bhd | DC HEALTHCARE vs. Eonmetall Group Bhd | DC HEALTHCARE vs. Star Media Group |
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.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |