Correlation Between Lotus KFM and DC HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Lotus KFM 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 Lotus KFM and DC HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus KFM Bhd and DC HEALTHCARE HOLDINGS, you can compare the effects of market volatilities on Lotus KFM 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 Lotus KFM with a short position of DC HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus KFM and DC HEALTHCARE.
Diversification Opportunities for Lotus KFM and DC HEALTHCARE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotus and 0283 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lotus KFM 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 Lotus KFM 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 Lotus KFM 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 Lotus KFM i.e., Lotus KFM and DC HEALTHCARE go up and down completely randomly.
Pair Corralation between Lotus KFM and DC HEALTHCARE
Assuming the 90 days trading horizon Lotus KFM Bhd is expected to under-perform the DC HEALTHCARE. In addition to that, Lotus KFM is 1.15 times more volatile than DC HEALTHCARE HOLDINGS. It trades about -0.07 of its total potential returns per unit of risk. DC HEALTHCARE HOLDINGS is currently generating about 0.02 per unit of volatility. If you would invest 17.00 in DC HEALTHCARE HOLDINGS on September 12, 2024 and sell it today you would earn a total of 0.00 from holding DC HEALTHCARE HOLDINGS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotus KFM Bhd vs. DC HEALTHCARE HOLDINGS
Performance |
| Timeline |
| Lotus KFM Bhd |
| DC HEALTHCARE HOLDINGS |
Lotus KFM and DC HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus KFM and DC HEALTHCARE
The main advantage of trading using opposite Lotus KFM and DC HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus KFM 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.| Lotus KFM vs. DC HEALTHCARE HOLDINGS | Lotus KFM vs. Kawan Food Bhd | Lotus KFM vs. Press Metal Bhd | Lotus KFM vs. Malayan Banking Bhd |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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