Correlation Between Minetech Resources and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Minetech Resources 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 Minetech Resources and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minetech Resources Bhd and IHH Healthcare Bhd, you can compare the effects of market volatilities on Minetech Resources 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 Minetech Resources with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and IHH Healthcare.
Diversification Opportunities for Minetech Resources and IHH Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Minetech and IHH is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd 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 Minetech Resources 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 Minetech Resources Bhd 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 Minetech Resources i.e., Minetech Resources and IHH Healthcare go up and down completely randomly.
Pair Corralation between Minetech Resources and IHH Healthcare
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to generate 5.42 times more return on investment than IHH Healthcare. However, Minetech Resources is 5.42 times more volatile than IHH Healthcare Bhd. It trades about 0.02 of its potential returns per unit of risk. IHH Healthcare Bhd is currently generating about -0.04 per unit of risk. If you would invest 14.00 in Minetech Resources Bhd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Minetech Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. IHH Healthcare Bhd
Performance |
| Timeline |
| Minetech Resources Bhd |
| IHH Healthcare Bhd |
Minetech Resources and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and IHH Healthcare
The main advantage of trading using opposite Minetech Resources and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources 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.| Minetech Resources vs. HeiTech Padu Bhd | Minetech Resources vs. Lysaght Galvanized Steel | Minetech Resources vs. Digistar Bhd | Minetech Resources vs. Swift Haulage Bhd |
| IHH Healthcare vs. Digistar Bhd | IHH Healthcare vs. Minetech Resources Bhd | IHH Healthcare vs. OpenSys M Bhd | IHH Healthcare vs. Insas 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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