Correlation Between Reservoir Media and IHH Healthcare

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

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

Diversification Opportunities for Reservoir Media and IHH Healthcare

0.0

Correlation Coefficient

Reservoir Media  IHH Healthcare

Pay attention - limited upside

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

Pair Corralation between Reservoir Media and IHH Healthcare

If you would invest  915.00  in Reservoir Media on September 24, 2024 and sell it today you would earn a total of  11.00  from holding Reservoir Media or generate 1.2% return on investment over 90 days.

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

Reservoir Media  vs.  IHH Healthcare Berhad

Reservoir Media

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Reservoir Media reported solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Reservoir Media and IHH Healthcare

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

The idea behind Reservoir Media and IHH Healthcare 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 Commodity Directory module to find actively traded commodities issued by global exchanges.