Correlation Between YTL Hospitality and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality and IHH 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 YTL Hospitality and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Hospitality REIT and IHH Healthcare Bhd, you can compare the effects of market volatilities on YTL Hospitality and IHH 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 YTL Hospitality with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and IHH Healthcare.
Diversification Opportunities for YTL Hospitality and IHH Healthcare
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YTL and IHH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT and IHH Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare Bhd and YTL Hospitality 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 YTL Hospitality REIT are associated (or correlated) with IHH Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHH Healthcare Bhd has no effect on the direction of YTL Hospitality i.e., YTL Hospitality and IHH Healthcare go up and down completely randomly.
Pair Corralation between YTL Hospitality and IHH Healthcare
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to generate 1.24 times more return on investment than IHH Healthcare. However, YTL Hospitality is 1.24 times more volatile than IHH Healthcare Bhd. It trades about 0.09 of its potential returns per unit of risk. IHH Healthcare Bhd is currently generating about 0.07 per unit of risk. If you would invest 77.00 in YTL Hospitality REIT on September 3, 2024 and sell it today you would earn a total of 43.00 from holding YTL Hospitality REIT or generate 55.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. IHH Healthcare Bhd
Performance |
| Timeline |
| YTL Hospitality REIT |
| IHH Healthcare Bhd |
YTL Hospitality and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and IHH Healthcare
The main advantage of trading using opposite YTL Hospitality and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality position performs unexpectedly, IHH 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 IHH Healthcare will offset losses from the drop in IHH Healthcare's long position.| YTL Hospitality vs. Minetech Resources Bhd | YTL Hospitality vs. Swift Haulage Bhd | YTL Hospitality vs. Insas Bhd | YTL Hospitality vs. Bina Darulaman Bhd |
| IHH Healthcare vs. Binasat Communications Bhd | IHH Healthcare vs. Aeon Credit Service | IHH Healthcare vs. KPJ Healthcare Bhd | IHH Healthcare vs. Media Prima 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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