Correlation Between Airports and Mahachai Hospital
Can any of the company-specific risk be diversified away by investing in both Airports and Mahachai 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 Airports and Mahachai Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airports of Thailand and Mahachai Hospital Public, you can compare the effects of market volatilities on Airports and Mahachai 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 Airports with a short position of Mahachai Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Mahachai Hospital.
Diversification Opportunities for Airports and Mahachai Hospital
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airports and Mahachai is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Mahachai Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahachai Hospital Public and Airports 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 Airports of Thailand are associated (or correlated) with Mahachai Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahachai Hospital Public has no effect on the direction of Airports i.e., Airports and Mahachai Hospital go up and down completely randomly.
Pair Corralation between Airports and Mahachai Hospital
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 1.44 times more return on investment than Mahachai Hospital. However, Airports is 1.44 times more volatile than Mahachai Hospital Public. It trades about 0.1 of its potential returns per unit of risk. Mahachai Hospital Public is currently generating about 0.06 per unit of risk. If you would invest 7,070 in Airports of Thailand on November 28, 2024 and sell it today you would lose (2,370) from holding Airports of Thailand or give up 33.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.13% |
| Values | Daily Returns |
Airports of Thailand vs. Mahachai Hospital Public
Performance |
| Timeline |
| Airports of Thailand |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Mahachai Hospital Public |
Airports and Mahachai Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Mahachai Hospital
The main advantage of trading using opposite Airports and Mahachai Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Mahachai 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 Mahachai Hospital will offset losses from the drop in Mahachai Hospital's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Mahachai Hospital vs. Ladprao General Hospital | Mahachai Hospital vs. Nonthavej Hospital Public | Mahachai Hospital vs. Wattana Karnpaet Public | Mahachai Hospital vs. Thonburi Medical Centre |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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