Correlation Between IHH Healthcare and Cloudpoint Technology
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Cloudpoint Technology 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 Cloudpoint Technology 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 Cloudpoint Technology Berhad, you can compare the effects of market volatilities on IHH Healthcare and Cloudpoint Technology 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 Cloudpoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Cloudpoint Technology.
Diversification Opportunities for IHH Healthcare and Cloudpoint Technology
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between IHH and Cloudpoint is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Bhd and Cloudpoint Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudpoint Technology 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 Cloudpoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudpoint Technology has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Cloudpoint Technology go up and down completely randomly.
Pair Corralation between IHH Healthcare and Cloudpoint Technology
Assuming the 90 days trading horizon IHH Healthcare is expected to generate 3.01 times less return on investment than Cloudpoint Technology. But when comparing it to its historical volatility, IHH Healthcare Bhd is 3.61 times less risky than Cloudpoint Technology. It trades about 0.07 of its potential returns per unit of risk. Cloudpoint Technology Berhad is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Cloudpoint Technology Berhad on November 28, 2024 and sell it today you would earn a total of 35.00 from holding Cloudpoint Technology Berhad or generate 71.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.05% |
| Values | Daily Returns |
IHH Healthcare Bhd vs. Cloudpoint Technology Berhad
Performance |
| Timeline |
| IHH Healthcare Bhd |
| Cloudpoint Technology |
IHH Healthcare and Cloudpoint Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Cloudpoint Technology
The main advantage of trading using opposite IHH Healthcare and Cloudpoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Cloudpoint Technology 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 Cloudpoint Technology will offset losses from the drop in Cloudpoint Technology's long position.| IHH Healthcare vs. Bank Islam Malaysia | IHH Healthcare vs. FARM FRESH BERHAD | IHH Healthcare vs. Icon Offshore Bhd | IHH Healthcare vs. Melewar Industrial Group |
| Cloudpoint Technology vs. Sunway Construction Group | Cloudpoint Technology vs. Malaysia Steel Works | Cloudpoint Technology vs. Cosmos Technology International | Cloudpoint Technology vs. Impiana Hotels 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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