Correlation Between Telekom Malaysia and DC HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Telekom Malaysia 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 Telekom Malaysia and DC HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telekom Malaysia Bhd and DC HEALTHCARE HOLDINGS, you can compare the effects of market volatilities on Telekom Malaysia 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 Telekom Malaysia with a short position of DC HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telekom Malaysia and DC HEALTHCARE.
Diversification Opportunities for Telekom Malaysia and DC HEALTHCARE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telekom and 0283 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia i.e., Telekom Malaysia and DC HEALTHCARE go up and down completely randomly.
Pair Corralation between Telekom Malaysia and DC HEALTHCARE
Assuming the 90 days trading horizon Telekom Malaysia Bhd is expected to generate 0.45 times more return on investment than DC HEALTHCARE. However, Telekom Malaysia Bhd is 2.23 times less risky than DC HEALTHCARE. It trades about -0.08 of its potential returns per unit of risk. DC HEALTHCARE HOLDINGS is currently generating about -0.09 per unit of risk. If you would invest 672.00 in Telekom Malaysia Bhd on October 25, 2024 and sell it today you would lose (15.00) from holding Telekom Malaysia Bhd or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telekom Malaysia Bhd vs. DC HEALTHCARE HOLDINGS
Performance |
| Timeline |
| Telekom Malaysia Bhd |
| DC HEALTHCARE HOLDINGS |
Telekom Malaysia and DC HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telekom Malaysia and DC HEALTHCARE
The main advantage of trading using opposite Telekom Malaysia and DC HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telekom Malaysia 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.| Telekom Malaysia vs. IHH Healthcare Bhd | Telekom Malaysia vs. RHB Bank Bhd | Telekom Malaysia vs. Media Prima Bhd | Telekom Malaysia vs. Lyc Healthcare Bhd |
| DC HEALTHCARE vs. Malaysia Steel Works | DC HEALTHCARE vs. Choo Bee Metal | DC HEALTHCARE vs. Eonmetall Group Bhd | DC HEALTHCARE vs. Rubberex M |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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