Correlation Between Aikchol Hospital and Thonburi Medical
Can any of the company-specific risk be diversified away by investing in both Aikchol Hospital and Thonburi Medical 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 Aikchol Hospital and Thonburi Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aikchol Hospital Public and Thonburi Medical Centre, you can compare the effects of market volatilities on Aikchol Hospital and Thonburi Medical 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 Aikchol Hospital with a short position of Thonburi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aikchol Hospital and Thonburi Medical.
Diversification Opportunities for Aikchol Hospital and Thonburi Medical
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aikchol and Thonburi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aikchol Hospital Public and Thonburi Medical Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thonburi Medical Centre and Aikchol Hospital 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 Aikchol Hospital Public are associated (or correlated) with Thonburi Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thonburi Medical Centre has no effect on the direction of Aikchol Hospital i.e., Aikchol Hospital and Thonburi Medical go up and down completely randomly.
Pair Corralation between Aikchol Hospital and Thonburi Medical
Assuming the 90 days trading horizon Aikchol Hospital is expected to generate 11.29 times less return on investment than Thonburi Medical. But when comparing it to its historical volatility, Aikchol Hospital Public is 2.11 times less risky than Thonburi Medical. It trades about 0.05 of its potential returns per unit of risk. Thonburi Medical Centre is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 9,000 in Thonburi Medical Centre on August 29, 2024 and sell it today you would earn a total of 700.00 from holding Thonburi Medical Centre or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aikchol Hospital Public vs. Thonburi Medical Centre
Performance |
| Timeline |
| Aikchol Hospital Public |
| Thonburi Medical Centre |
Aikchol Hospital and Thonburi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aikchol Hospital and Thonburi Medical
The main advantage of trading using opposite Aikchol Hospital and Thonburi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aikchol Hospital position performs unexpectedly, Thonburi Medical 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 Thonburi Medical will offset losses from the drop in Thonburi Medical's long position.| Aikchol Hospital vs. AP Public | Aikchol Hospital vs. Bumrungrad Hospital Public | Aikchol Hospital vs. Advanced Information Technology | Aikchol Hospital vs. AJ Plast Public |
| Thonburi Medical vs. Aikchol Hospital Public | Thonburi Medical vs. Nonthavej Hospital Public | Thonburi Medical vs. Wattana Karnpaet Public | Thonburi Medical vs. Mahachai Hospital Public |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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