Correlation Between Public Bank and DC HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Public Bank and DC HEALTHCARE 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 Public Bank and DC HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Bank Bhd and DC HEALTHCARE HOLDINGS, you can compare the effects of market volatilities on Public Bank and DC HEALTHCARE 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 Public Bank with a short position of DC HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and DC HEALTHCARE.
Diversification Opportunities for Public Bank and DC HEALTHCARE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Public and 0283 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and DC HEALTHCARE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC HEALTHCARE HOLDINGS and Public Bank 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 Public Bank Bhd are associated (or correlated) with DC HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC HEALTHCARE HOLDINGS has no effect on the direction of Public Bank i.e., Public Bank and DC HEALTHCARE go up and down completely randomly.
Pair Corralation between Public Bank and DC HEALTHCARE
Assuming the 90 days trading horizon Public Bank Bhd is expected to under-perform the DC HEALTHCARE. But the stock apears to be less risky and, when comparing its historical volatility, Public Bank Bhd is 2.29 times less risky than DC HEALTHCARE. The stock trades about -0.09 of its potential returns per unit of risk. The DC HEALTHCARE HOLDINGS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 18.00 in DC HEALTHCARE HOLDINGS on August 26, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. DC HEALTHCARE HOLDINGS
Performance |
| Timeline |
| Public Bank Bhd |
| DC HEALTHCARE HOLDINGS |
Public Bank and DC HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and DC HEALTHCARE
The main advantage of trading using opposite Public Bank and DC HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, DC HEALTHCARE 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 DC HEALTHCARE will offset losses from the drop in DC HEALTHCARE's long position.| Public Bank vs. Malaysia Steel Works | Public Bank vs. Eonmetall Group Bhd | Public Bank vs. Press Metal Bhd | Public Bank vs. MClean Technologies Bhd |
| DC HEALTHCARE vs. Malayan Banking Bhd | DC HEALTHCARE vs. Public Bank Bhd | DC HEALTHCARE vs. Petronas Chemicals Group | DC HEALTHCARE vs. Tenaga Nasional 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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