Correlation Between DC HEALTHCARE and Oriental Food
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Oriental Food 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 Oriental Food 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 Oriental Food Industries, you can compare the effects of market volatilities on DC HEALTHCARE and Oriental Food 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 Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Oriental Food.
Diversification Opportunities for DC HEALTHCARE and Oriental Food
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0283 and Oriental is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Oriental Food go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Oriental Food
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 1.22 times more return on investment than Oriental Food. However, DC HEALTHCARE is 1.22 times more volatile than Oriental Food Industries. It trades about -0.12 of its potential returns per unit of risk. Oriental Food Industries is currently generating about -0.16 per unit of risk. If you would invest 18.00 in DC HEALTHCARE HOLDINGS on November 4, 2024 and sell it today you would lose (1.00) from holding DC HEALTHCARE HOLDINGS or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Oriental Food Industries
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Oriental Food Industries |
DC HEALTHCARE and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Oriental Food
The main advantage of trading using opposite DC HEALTHCARE and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| DC HEALTHCARE vs. Media Prima Bhd | DC HEALTHCARE vs. Alliance Financial Group | DC HEALTHCARE vs. Oriental Food Industries | DC HEALTHCARE vs. Public Bank Bhd |
| Oriental Food vs. Hong Leong Bank | Oriental Food vs. RHB Bank Bhd | Oriental Food vs. Alliance Financial Group | Oriental Food 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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