Correlation Between DC HEALTHCARE and K One

Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and K One 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 DC HEALTHCARE and K One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DC HEALTHCARE HOLDINGS and K One Technology Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and K One 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 DC HEALTHCARE with a short position of K One. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and K One.

Diversification Opportunities for DC HEALTHCARE and K One

0.48

Correlation Coefficient

DC HEALTHCARE  K One

Very weak diversification

The 3 months correlation between 0283 and 0111 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and K One Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K One Technology and DC 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 DC HEALTHCARE HOLDINGS are associated (or correlated) with K One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K One Technology has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and K One go up and down completely randomly.

Pair Corralation between DC HEALTHCARE and K One

Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 22.41 times more return on investment than K One. However, DC HEALTHCARE is 22.41 times more volatile than K One Technology Bhd. It trades about 0.1 of its potential returns per unit of risk. K One Technology Bhd is currently generating about 0.04 per unit of risk. If you would invest  45.00  in DC HEALTHCARE HOLDINGS on October 15, 2024 and sell it today you would lose (28.00) from holding DC HEALTHCARE HOLDINGS or give up 62.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	77.53%
Values	Daily Returns

DC HEALTHCARE HOLDINGS  vs.  K One Technology Bhd

DC HEALTHCARE HOLDINGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DC HEALTHCARE HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, DC HEALTHCARE is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

K One Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in K One Technology Bhd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, K One disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DC HEALTHCARE and K One

The main advantage of trading using opposite DC HEALTHCARE and K One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, K One 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 K One will offset losses from the drop in K One's long position.

The idea behind DC HEALTHCARE HOLDINGS and K One Technology Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.