Correlation Between Oriental Food and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Oriental Food and IHH 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 Oriental Food and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and IHH Healthcare Bhd, you can compare the effects of market volatilities on Oriental Food and IHH 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 Oriental Food with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and IHH Healthcare.
Diversification Opportunities for Oriental Food and IHH Healthcare
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oriental and IHH is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and IHH Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare Bhd and Oriental Food 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 Oriental Food Industries are associated (or correlated) with IHH Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHH Healthcare Bhd has no effect on the direction of Oriental Food i.e., Oriental Food and IHH Healthcare go up and down completely randomly.
Pair Corralation between Oriental Food and IHH Healthcare
Assuming the 90 days trading horizon Oriental Food Industries is expected to under-perform the IHH Healthcare. In addition to that, Oriental Food is 2.39 times more volatile than IHH Healthcare Bhd. It trades about -0.07 of its total potential returns per unit of risk. IHH Healthcare Bhd is currently generating about -0.01 per unit of volatility. If you would invest 728.00 in IHH Healthcare Bhd on September 2, 2024 and sell it today you would lose (2.00) from holding IHH Healthcare Bhd or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Food Industries vs. IHH Healthcare Bhd
Performance |
| Timeline |
| Oriental Food Industries |
| IHH Healthcare Bhd |
Oriental Food and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and IHH Healthcare
The main advantage of trading using opposite Oriental Food and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, IHH 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 IHH Healthcare will offset losses from the drop in IHH Healthcare's long position.| Oriental Food vs. British American Tobacco | Oriental Food vs. FARM FRESH BERHAD | Oriental Food vs. Apollo Food Holdings |
| IHH Healthcare vs. Cloudpoint Technology Berhad | IHH Healthcare vs. Duopharma Biotech Bhd | IHH Healthcare vs. Dataprep Holdings Bhd | IHH Healthcare vs. Uchi Technologies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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