Correlation Between JD Health and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both JD Health 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 JD Health and IHH Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Health International and IHH Healthcare Berhad, you can compare the effects of market volatilities on JD Health 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 JD Health with a short position of IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Health and IHH Healthcare.
Diversification Opportunities for JD Health and IHH Healthcare
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between JDHIF and IHH is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding JD Health International 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 JD Health 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 JD Health International 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 JD Health i.e., JD Health and IHH Healthcare go up and down completely randomly.
Pair Corralation between JD Health and IHH Healthcare
Assuming the 90 days horizon JD Health International is expected to under-perform the IHH Healthcare. In addition to that, JD Health is 5.93 times more volatile than IHH Healthcare Berhad. It trades about -0.07 of its total potential returns per unit of risk. IHH Healthcare Berhad is currently generating about 0.03 per unit of volatility. If you would invest 116.00 in IHH Healthcare Berhad on September 12, 2024 and sell it today you would earn a total of 3.00 from holding IHH Healthcare Berhad or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 62.12% |
| Values | Daily Returns |
JD Health International vs. IHH Healthcare Berhad
Performance |
| Timeline |
| JD Health International |
| IHH Healthcare Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JD Health and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Health and IHH Healthcare
The main advantage of trading using opposite JD Health and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Health 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.| JD Health vs. Pennant Group | JD Health vs. Encompass Health Corp | JD Health vs. Enhabit | JD Health vs. Concord Medical Services |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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