Correlation Between IHH Healthcare and Sime Darby
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Sime Darby 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 Sime Darby 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 Sime Darby Plantation, you can compare the effects of market volatilities on IHH Healthcare and Sime Darby 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 Sime Darby. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Sime Darby.
Diversification Opportunities for IHH Healthcare and Sime Darby
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IHH and Sime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Bhd and Sime Darby Plantation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sime Darby Plantation 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 Sime Darby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sime Darby Plantation has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Sime Darby go up and down completely randomly.
Pair Corralation between IHH Healthcare and Sime Darby
Assuming the 90 days trading horizon IHH Healthcare Bhd is expected to generate 0.72 times more return on investment than Sime Darby. However, IHH Healthcare Bhd is 1.39 times less risky than Sime Darby. It trades about -0.04 of its potential returns per unit of risk. Sime Darby Plantation is currently generating about -0.11 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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
IHH Healthcare Bhd vs. Sime Darby Plantation
Performance |
| Timeline |
| IHH Healthcare Bhd |
| Sime Darby Plantation |
IHH Healthcare and Sime Darby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Sime Darby
The main advantage of trading using opposite IHH Healthcare and Sime Darby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Sime Darby 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 Sime Darby will offset losses from the drop in Sime Darby's long position.| IHH Healthcare vs. Farm Price Holdings | IHH Healthcare vs. Aeon Credit Service | IHH Healthcare vs. Petronas Chemicals Group | IHH Healthcare vs. Rubberex M |
| Sime Darby vs. Mercury Industries Bhd | Sime Darby vs. Impiana Hotels Bhd | Sime Darby vs. Eonmetall Group Bhd | Sime Darby vs. Apex 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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