Correlation Between Analog Devices and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and IHH Healthcare Berhad, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and IHH Healthcare.
Diversification Opportunities for Analog Devices and IHH Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Analog and IHH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and IHH Healthcare Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare Berhad and Analog Devices 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 Analog Devices 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 Berhad has no effect on the direction of Analog Devices i.e., Analog Devices and IHH Healthcare go up and down completely randomly.
Pair Corralation between Analog Devices and IHH Healthcare
Considering the 90-day investment horizon Analog Devices is expected to generate 6.5 times more return on investment than IHH Healthcare. However, Analog Devices is 6.5 times more volatile than IHH Healthcare Berhad. It trades about 0.04 of its potential returns per unit of risk. IHH Healthcare Berhad is currently generating about 0.07 per unit of risk. If you would invest 18,770 in Analog Devices on September 4, 2024 and sell it today you would earn a total of 3,384 from holding Analog Devices or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 80.97% |
| Values | Daily Returns |
Analog Devices vs. IHH Healthcare Berhad
Performance |
| Timeline |
| Analog Devices |
| IHH Healthcare Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Analog Devices and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and IHH Healthcare
The main advantage of trading using opposite Analog Devices and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
| IHH Healthcare vs. Tower Semiconductor | IHH Healthcare vs. Entegris | IHH Healthcare vs. Analog Devices | IHH Healthcare vs. Elmos Semiconductor SE |
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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