Correlation Between DC HEALTHCARE and Leader Steel
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Leader Steel 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 Leader Steel 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 Leader Steel Holdings, you can compare the effects of market volatilities on DC HEALTHCARE and Leader Steel 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 Leader Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Leader Steel.
Diversification Opportunities for DC HEALTHCARE and Leader Steel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0283 and Leader is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Leader Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Steel Holdings 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 Leader Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Steel Holdings has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Leader Steel go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Leader Steel
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 29.44 times more return on investment than Leader Steel. However, DC HEALTHCARE is 29.44 times more volatile than Leader Steel Holdings. It trades about 0.1 of its potential returns per unit of risk. Leader Steel Holdings is currently generating about 0.01 per unit of risk. If you would invest 45.00 in DC HEALTHCARE HOLDINGS on November 1, 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 Against |
| Strength | Very Weak |
| Accuracy | 79.67% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Leader Steel Holdings
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Leader Steel Holdings |
DC HEALTHCARE and Leader Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Leader Steel
The main advantage of trading using opposite DC HEALTHCARE and Leader Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Leader Steel 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 Leader Steel will offset losses from the drop in Leader Steel's long position.| DC HEALTHCARE vs. KPJ Healthcare Bhd | DC HEALTHCARE vs. Cengild Medical Berhad | DC HEALTHCARE vs. YX Precious Metals | DC HEALTHCARE vs. Steel Hawk Berhad |
| Leader Steel vs. Kawan Food Bhd | Leader Steel vs. FARM FRESH BERHAD | Leader Steel vs. KPJ Healthcare Bhd | Leader Steel vs. DC HEALTHCARE HOLDINGS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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