Correlation Between AMMB Holdings and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both AMMB Holdings and Lyc 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 AMMB Holdings and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMMB Holdings Bhd and Lyc Healthcare Bhd, you can compare the effects of market volatilities on AMMB Holdings and Lyc 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 AMMB Holdings with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMMB Holdings and Lyc Healthcare.
Diversification Opportunities for AMMB Holdings and Lyc Healthcare
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMMB and Lyc is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AMMB Holdings Bhd and Lyc Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyc Healthcare Bhd and AMMB Holdings 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 AMMB Holdings Bhd are associated (or correlated) with Lyc Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyc Healthcare Bhd has no effect on the direction of AMMB Holdings i.e., AMMB Holdings and Lyc Healthcare go up and down completely randomly.
Pair Corralation between AMMB Holdings and Lyc Healthcare
Assuming the 90 days trading horizon AMMB Holdings is expected to generate 3.58 times less return on investment than Lyc Healthcare. But when comparing it to its historical volatility, AMMB Holdings Bhd is 3.56 times less risky than Lyc Healthcare. It trades about 0.08 of its potential returns per unit of risk. Lyc Healthcare Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Lyc Healthcare Bhd on September 25, 2024 and sell it today you would earn a total of 1.50 from holding Lyc Healthcare Bhd or generate 18.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
AMMB Holdings Bhd vs. Lyc Healthcare Bhd
Performance |
Timeline |
AMMB Holdings Bhd |
Lyc Healthcare Bhd |
AMMB Holdings and Lyc Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMMB Holdings and Lyc Healthcare
The main advantage of trading using opposite AMMB Holdings and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMMB Holdings position performs unexpectedly, Lyc 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 Lyc Healthcare will offset losses from the drop in Lyc Healthcare's long position.AMMB Holdings vs. Alliance Financial Group | AMMB Holdings vs. Aeon Credit Service | AMMB Holdings vs. OSK Holdings Bhd | AMMB Holdings vs. Kuala Lumpur Kepong |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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