Correlation Between KPJ Healthcare and DC HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare 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 KPJ Healthcare and DC HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPJ Healthcare Bhd and DC HEALTHCARE HOLDINGS, you can compare the effects of market volatilities on KPJ Healthcare 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 KPJ Healthcare with a short position of DC HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and DC HEALTHCARE.
Diversification Opportunities for KPJ Healthcare and DC HEALTHCARE
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KPJ and 0283 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare Bhd 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 KPJ 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 KPJ Healthcare Bhd 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 KPJ Healthcare i.e., KPJ Healthcare and DC HEALTHCARE go up and down completely randomly.
Pair Corralation between KPJ Healthcare and DC HEALTHCARE
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 0.34 times more return on investment than DC HEALTHCARE. However, KPJ Healthcare Bhd is 2.9 times less risky than DC HEALTHCARE. It trades about 0.7 of its potential returns per unit of risk. DC HEALTHCARE HOLDINGS is currently generating about 0.1 per unit of risk. If you would invest 207.00 in KPJ Healthcare Bhd on August 30, 2024 and sell it today you would earn a total of 40.00 from holding KPJ Healthcare Bhd or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KPJ Healthcare Bhd vs. DC HEALTHCARE HOLDINGS
Performance |
| Timeline |
| KPJ Healthcare Bhd |
| DC HEALTHCARE HOLDINGS |
KPJ Healthcare and DC HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPJ Healthcare and DC HEALTHCARE
The main advantage of trading using opposite KPJ Healthcare and DC HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare 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.| KPJ Healthcare vs. Computer Forms Bhd | KPJ Healthcare vs. Impiana Hotels Bhd | KPJ Healthcare vs. Berjaya Food Bhd | KPJ Healthcare vs. Riverview Rubber Estates |
| DC HEALTHCARE vs. Eversafe Rubber Bhd | DC HEALTHCARE vs. Riverview Rubber Estates | DC HEALTHCARE vs. BP Plastics Holding | DC HEALTHCARE vs. FARM FRESH BERHAD |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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