Correlation Between IHH Healthcare and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Binasat Communications 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 IHH Healthcare and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHH Healthcare Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on IHH Healthcare and Binasat Communications 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 IHH Healthcare with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Binasat Communications.
Diversification Opportunities for IHH Healthcare and Binasat Communications
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IHH and Binasat is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and IHH 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 IHH Healthcare Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Binasat Communications go up and down completely randomly.
Pair Corralation between IHH Healthcare and Binasat Communications
Assuming the 90 days trading horizon IHH Healthcare Bhd is expected to generate 0.37 times more return on investment than Binasat Communications. However, IHH Healthcare Bhd is 2.73 times less risky than Binasat Communications. It trades about -0.04 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.22 per unit of risk. If you would invest 715.00 in IHH Healthcare Bhd on October 16, 2024 and sell it today you would lose (5.00) from holding IHH Healthcare Bhd or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHH Healthcare Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| IHH Healthcare Bhd |
| Binasat Communications |
IHH Healthcare and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Binasat Communications
The main advantage of trading using opposite IHH Healthcare and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| IHH Healthcare vs. Icon Offshore Bhd | IHH Healthcare vs. Star Media Group | IHH Healthcare vs. Oriental Food Industries | IHH Healthcare vs. Press Metal Bhd |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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