Correlation Between American Airlines and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both American Airlines and Bumrungrad Hospital 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 American Airlines and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and Bumrungrad Hospital Public, you can compare the effects of market volatilities on American Airlines and Bumrungrad Hospital 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 American Airlines with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Bumrungrad Hospital.
Diversification Opportunities for American Airlines and Bumrungrad Hospital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Bumrungrad is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and American Airlines 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 American Airlines Group are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of American Airlines i.e., American Airlines and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between American Airlines and Bumrungrad Hospital
Assuming the 90 days horizon American Airlines Group is expected to under-perform the Bumrungrad Hospital. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 1.27 times less risky than Bumrungrad Hospital. The stock trades about -0.38 of its potential returns per unit of risk. The Bumrungrad Hospital Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 490.00 in Bumrungrad Hospital Public on November 28, 2024 and sell it today you would earn a total of 15.00 from holding Bumrungrad Hospital Public or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| American Airlines |
| Bumrungrad Hospital |
American Airlines and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Bumrungrad Hospital
The main advantage of trading using opposite American Airlines and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Bumrungrad Hospital 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| American Airlines vs. SMA Solar Technology | American Airlines vs. Computer And Technologies | American Airlines vs. Check Point Software | American Airlines vs. The Hanover Insurance |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Select Medical Holdings | Bumrungrad Hospital vs. Medicover AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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