Correlation Between IHH Healthcare and Unisem M
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Unisem M 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 Unisem M 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 Unisem M Bhd, you can compare the effects of market volatilities on IHH Healthcare and Unisem M 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 Unisem M. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Unisem M.
Diversification Opportunities for IHH Healthcare and Unisem M
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IHH and Unisem is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Bhd and Unisem M Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisem M Bhd 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 Unisem M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisem M Bhd has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Unisem M go up and down completely randomly.
Pair Corralation between IHH Healthcare and Unisem M
Assuming the 90 days trading horizon IHH Healthcare Bhd is expected to generate 0.38 times more return on investment than Unisem M. However, IHH Healthcare Bhd is 2.61 times less risky than Unisem M. It trades about 0.14 of its potential returns per unit of risk. Unisem M Bhd is currently generating about -0.09 per unit of risk. If you would invest 615.00 in IHH Healthcare Bhd on August 29, 2024 and sell it today you would earn a total of 110.00 from holding IHH Healthcare Bhd or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHH Healthcare Bhd vs. Unisem M Bhd
Performance |
| Timeline |
| IHH Healthcare Bhd |
| Unisem M Bhd |
IHH Healthcare and Unisem M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Unisem M
The main advantage of trading using opposite IHH Healthcare and Unisem M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Unisem M 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 Unisem M will offset losses from the drop in Unisem M's long position.| IHH Healthcare vs. KPJ Healthcare Bhd | IHH Healthcare vs. Lyc Healthcare Bhd | IHH Healthcare vs. Minetech Resources Bhd | IHH Healthcare vs. Sunzen Biotech Bhd |
| Unisem M vs. Malayan Banking Bhd | Unisem M vs. Public Bank Bhd | Unisem M vs. Petronas Chemicals Group | Unisem M vs. IHH Healthcare 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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