Correlation Between IHH Healthcare and Dataprep Holdings
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Dataprep Holdings 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 Dataprep Holdings 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 Dataprep Holdings Bhd, you can compare the effects of market volatilities on IHH Healthcare and Dataprep Holdings 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 Dataprep Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Dataprep Holdings.
Diversification Opportunities for IHH Healthcare and Dataprep Holdings
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IHH and Dataprep is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Bhd and Dataprep Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataprep Holdings 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 Dataprep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataprep Holdings Bhd has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Dataprep Holdings go up and down completely randomly.
Pair Corralation between IHH Healthcare and Dataprep Holdings
Assuming the 90 days trading horizon IHH Healthcare Bhd is expected to generate 0.24 times more return on investment than Dataprep Holdings. However, IHH Healthcare Bhd is 4.24 times less risky than Dataprep Holdings. It trades about -0.01 of its potential returns per unit of risk. Dataprep Holdings Bhd is currently generating about -0.03 per unit of risk. If you would invest 726.00 in IHH Healthcare Bhd on October 30, 2024 and sell it today you would lose (3.00) from holding IHH Healthcare Bhd or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHH Healthcare Bhd vs. Dataprep Holdings Bhd
Performance |
| Timeline |
| IHH Healthcare Bhd |
| Dataprep Holdings Bhd |
IHH Healthcare and Dataprep Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Dataprep Holdings
The main advantage of trading using opposite IHH Healthcare and Dataprep Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Dataprep Holdings 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 Dataprep Holdings will offset losses from the drop in Dataprep Holdings' long position.| IHH Healthcare vs. Homeritz Bhd | IHH Healthcare vs. Computer Forms Bhd | IHH Healthcare vs. Press Metal Bhd | IHH Healthcare vs. Sunzen Biotech Bhd |
| Dataprep Holdings vs. Berjaya Food Bhd | Dataprep Holdings vs. Apollo Food Holdings | Dataprep Holdings vs. Press Metal Bhd | Dataprep Holdings vs. Star Media Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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