Correlation Between Lyc Healthcare and Binasat Communications

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lyc Healthcare and Binasat Communications 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 Lyc Healthcare and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyc Healthcare Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Lyc Healthcare and Binasat Communications 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 Lyc Healthcare with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyc Healthcare and Binasat Communications.

Diversification Opportunities for Lyc Healthcare and Binasat Communications

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lyc and Binasat is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lyc Healthcare Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Lyc 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 Lyc Healthcare Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Lyc Healthcare i.e., Lyc Healthcare and Binasat Communications go up and down completely randomly.

Pair Corralation between Lyc Healthcare and Binasat Communications

Assuming the 90 days trading horizon Lyc Healthcare Bhd is expected to generate 1.48 times more return on investment than Binasat Communications. However, Lyc Healthcare is 1.48 times more volatile than Binasat Communications Bhd. It trades about -0.04 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.07 per unit of risk. If you would invest  20.00  in Lyc Healthcare Bhd on September 26, 2024 and sell it today you would lose (10.50) from holding Lyc Healthcare Bhd or give up 52.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lyc Healthcare Bhd  vs.  Binasat Communications Bhd

 Performance 
       Timeline  
Lyc Healthcare Bhd 

Risk-Adjusted Performance

4 of 100

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

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Binasat Communications 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.

Lyc Healthcare and Binasat Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lyc Healthcare and Binasat Communications

The main advantage of trading using opposite Lyc Healthcare and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyc Healthcare position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.
The idea behind Lyc Healthcare Bhd and Binasat Communications 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.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Technical Analysis
Check basic technical indicators and analysis based on most latest market data