Correlation Between AJ Plast and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both AJ Plast 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 AJ Plast and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Plast Public and Bumrungrad Hospital Public, you can compare the effects of market volatilities on AJ Plast 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 AJ Plast with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Bumrungrad Hospital.
Diversification Opportunities for AJ Plast and Bumrungrad Hospital
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AJ Plast and Bumrungrad is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and AJ Plast 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 AJ Plast Public 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 AJ Plast i.e., AJ Plast and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between AJ Plast and Bumrungrad Hospital
Assuming the 90 days horizon AJ Plast Public is expected to generate 0.41 times more return on investment than Bumrungrad Hospital. However, AJ Plast Public is 2.42 times less risky than Bumrungrad Hospital. It trades about -0.21 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.44 per unit of risk. If you would invest 505.00 in AJ Plast Public on September 1, 2024 and sell it today you would lose (25.00) from holding AJ Plast Public or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| AJ Plast Public |
| Bumrungrad Hospital |
AJ Plast and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Bumrungrad Hospital
The main advantage of trading using opposite AJ Plast and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast 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.| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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