Correlation Between DC HEALTHCARE and Steel Hawk

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

Diversification Opportunities for DC HEALTHCARE and Steel Hawk

0.66

Correlation Coefficient

DC HEALTHCARE  Steel Hawk

Poor diversification

The 3 months correlation between 0283 and Steel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Steel Hawk Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Hawk Berhad 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 Steel Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Hawk Berhad has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Steel Hawk go up and down completely randomly.

Pair Corralation between DC HEALTHCARE and Steel Hawk

Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 1.72 times more return on investment than Steel Hawk. However, DC HEALTHCARE is 1.72 times more volatile than Steel Hawk Berhad. It trades about 0.02 of its potential returns per unit of risk. Steel Hawk Berhad is currently generating about 0.03 per unit of risk. If you would invest  18.00  in DC HEALTHCARE HOLDINGS on December 22, 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	Significant
Accuracy	100.0%
Values	Daily Returns

DC HEALTHCARE HOLDINGS  vs.  Steel Hawk Berhad

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Steel Hawk Berhad

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Hawk Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Steel Hawk is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with DC HEALTHCARE and Steel Hawk

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

The idea behind DC HEALTHCARE HOLDINGS and Steel Hawk Berhad 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.