Correlation Between IHH Healthcare and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both IHH Healthcare and Tower Semiconductor 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 IHH Healthcare and Tower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHH Healthcare Berhad and Tower Semiconductor, you can compare the effects of market volatilities on IHH Healthcare and Tower Semiconductor 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 IHH Healthcare with a short position of Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and Tower Semiconductor.
Diversification Opportunities for IHH Healthcare and Tower Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IHH and Tower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Berhad and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor and IHH 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 IHH Healthcare Berhad are associated (or correlated) with Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and Tower Semiconductor go up and down completely randomly.
Pair Corralation between IHH Healthcare and Tower Semiconductor
Assuming the 90 days horizon IHH Healthcare Berhad is expected to under-perform the Tower Semiconductor. But the pink sheet apears to be less risky and, when comparing its historical volatility, IHH Healthcare Berhad is 1.28 times less risky than Tower Semiconductor. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Tower Semiconductor is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,599 in Tower Semiconductor on September 5, 2024 and sell it today you would earn a total of 296.00 from holding Tower Semiconductor or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.52% |
| Values | Daily Returns |
IHH Healthcare Berhad vs. Tower Semiconductor
Performance |
| Timeline |
| IHH Healthcare Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tower Semiconductor |
IHH Healthcare and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHH Healthcare and Tower Semiconductor
The main advantage of trading using opposite IHH Healthcare and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHH Healthcare position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| IHH Healthcare vs. Cumberland Pharmaceuticals | IHH Healthcare vs. Chiba Bank Ltd | IHH Healthcare vs. Freedom Bank of | IHH Healthcare vs. Teleflex Incorporated |
| Tower Semiconductor vs. NXP Semiconductors NV | Tower Semiconductor vs. Monolithic Power Systems | Tower Semiconductor vs. ON Semiconductor | Tower Semiconductor vs. GSI Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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