Correlation Between DC HEALTHCARE and Sunzen Biotech

Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and Sunzen Biotech 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 Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Sunzen Biotech.

Diversification Opportunities for DC HEALTHCARE and Sunzen Biotech

0.48

Correlation Coefficient

DC HEALTHCARE  Sunzen Biotech

Very weak diversification

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

Pair Corralation between DC HEALTHCARE and Sunzen Biotech

Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 1.78 times more return on investment than Sunzen Biotech. However, DC HEALTHCARE is 1.78 times more volatile than Sunzen Biotech Bhd. It trades about 0.02 of its potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about -0.07 per unit of risk. If you would invest  18.00  in DC HEALTHCARE HOLDINGS on December 23, 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

DC HEALTHCARE HOLDINGS  vs.  Sunzen Biotech Bhd

DC HEALTHCARE HOLDINGS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DC HEALTHCARE HOLDINGS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Sunzen Biotech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunzen Biotech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with DC HEALTHCARE and Sunzen Biotech

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

The idea behind DC HEALTHCARE HOLDINGS and Sunzen Biotech 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.