Correlation Between Asia Medical and Praram 9
Can any of the company-specific risk be diversified away by investing in both Asia Medical and Praram 9 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 Asia Medical and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Medical Agricultural and Praram 9 Hospital, you can compare the effects of market volatilities on Asia Medical and Praram 9 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 Asia Medical with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and Praram 9.
Diversification Opportunities for Asia Medical and Praram 9
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Praram is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and Asia Medical 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 Asia Medical Agricultural are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of Asia Medical i.e., Asia Medical and Praram 9 go up and down completely randomly.
Pair Corralation between Asia Medical and Praram 9
Assuming the 90 days trading horizon Asia Medical Agricultural is expected to under-perform the Praram 9. In addition to that, Asia Medical is 1.35 times more volatile than Praram 9 Hospital. It trades about -0.04 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.05 per unit of volatility. If you would invest 1,948 in Praram 9 Hospital on August 31, 2024 and sell it today you would earn a total of 602.00 from holding Praram 9 Hospital or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Medical Agricultural vs. Praram 9 Hospital
Performance |
| Timeline |
| Asia Medical Agricultural |
| Praram 9 Hospital |
Asia Medical and Praram 9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Medical and Praram 9
The main advantage of trading using opposite Asia Medical and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Medical position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.| Asia Medical vs. Asian Alliance International | Asia Medical vs. International Network System | Asia Medical vs. The Klinique Med | Asia Medical vs. Exotic Food Public |
| Praram 9 vs. Bangkok Dusit Medical | Praram 9 vs. Bumrungrad Hospital Public | Praram 9 vs. Bangkok Chain Hospital | Praram 9 vs. Rajthanee 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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