Dynamic Forecasting method for Shariah-compliant Share Price of Healthcare sector in Malaysian Stock Exchange

Abstract

The healthcare sector is the category of stocks relating to medical and healthcare goods or services. The healthcare sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. The objective of this research paper is to forecast the performance of share price for healthcare sector in Malaysia. The research methodology implemented in this study is forecasting method using autoregressive integrated moving average (ARIMA). Data selection in this study is share price of healthcare company sector namely IHH Healthcare Berhad. Result shows the ARIMA(1,1,1) model exhibits r-squared value of 0.184 and Akaike Information Criterion (AIC) value is-1.112. Residual diagnostics shows ARIMA (1,1,1) is reliable model for forecasting of healthcare sector in Malaysia. The findings from this study will help economists to analyze the stock market performance especially in healthcare sector in Malaysia. This result also will help investors to decide appropriate decision in portfolio selection of capital investment.