Correlation Between IHH Healthcare and NETGEAR

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

By analyzing existing cross correlation between IHH Healthcare Berhad and NETGEAR, you can compare the effects of market volatilities on IHH Healthcare and NETGEAR 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 IHH Healthcare with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHH Healthcare and NETGEAR.

Diversification Opportunities for IHH Healthcare and NETGEAR

0.0

Correlation Coefficient

IHH Healthcare  NETGEAR

Pay attention - limited upside

The 3 months correlation between IHH and NETGEAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IHH Healthcare Berhad and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and IHH 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 IHH Healthcare Berhad are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of IHH Healthcare i.e., IHH Healthcare and NETGEAR go up and down completely randomly.

Pair Corralation between IHH Healthcare and NETGEAR

If you would invest  2,431  in NETGEAR on September 25, 2024 and sell it today you would earn a total of  408.00  from holding NETGEAR or generate 16.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

IHH Healthcare Berhad  vs.  NETGEAR

IHH Healthcare Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IHH Healthcare Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, IHH Healthcare is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

NETGEAR

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IHH Healthcare and NETGEAR

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

The idea behind IHH Healthcare Berhad and NETGEAR 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.