Correlation Between Hong Leong and DC HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Hong Leong and DC HEALTHCARE 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 Hong Leong and DC HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Leong Bank and DC HEALTHCARE HOLDINGS, you can compare the effects of market volatilities on Hong Leong and DC HEALTHCARE 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 Hong Leong with a short position of DC HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Leong and DC HEALTHCARE.
Diversification Opportunities for Hong Leong and DC HEALTHCARE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and 0283 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hong Leong Bank and DC HEALTHCARE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC HEALTHCARE HOLDINGS and Hong Leong 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 Hong Leong Bank are associated (or correlated) with DC HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC HEALTHCARE HOLDINGS has no effect on the direction of Hong Leong i.e., Hong Leong and DC HEALTHCARE go up and down completely randomly.
Pair Corralation between Hong Leong and DC HEALTHCARE
Assuming the 90 days trading horizon Hong Leong is expected to generate 372.96 times less return on investment than DC HEALTHCARE. But when comparing it to its historical volatility, Hong Leong Bank is 184.61 times less risky than DC HEALTHCARE. It trades about 0.06 of its potential returns per unit of risk. DC HEALTHCARE HOLDINGS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 40.00 in DC HEALTHCARE HOLDINGS on August 26, 2024 and sell it today you would lose (23.00) from holding DC HEALTHCARE HOLDINGS or give up 57.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Hong Leong Bank vs. DC HEALTHCARE HOLDINGS
Performance |
| Timeline |
| Hong Leong Bank |
| DC HEALTHCARE HOLDINGS |
Hong Leong and DC HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Leong and DC HEALTHCARE
The main advantage of trading using opposite Hong Leong and DC HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Leong position performs unexpectedly, DC HEALTHCARE 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 DC HEALTHCARE will offset losses from the drop in DC HEALTHCARE's long position.| Hong Leong vs. Pantech Group Holdings | Hong Leong vs. Cloudpoint Technology Berhad | Hong Leong vs. YTL Hospitality REIT | Hong Leong vs. Nova Wellness Group |
| DC HEALTHCARE vs. Malayan Banking Bhd | DC HEALTHCARE vs. Public Bank Bhd | DC HEALTHCARE vs. Petronas Chemicals Group | DC HEALTHCARE vs. Tenaga Nasional 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 CEOs Directory module to screen CEOs from public companies around the world.
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