Correlation Between Airports and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Airports 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 Airports and Bumrungrad 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 Bumrungrad Hospital Public, you can compare the effects of market volatilities on Airports 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 Airports with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Bumrungrad Hospital.
Diversification Opportunities for Airports and Bumrungrad Hospital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Bumrungrad is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital 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 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 Airports i.e., Airports and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Airports and Bumrungrad Hospital
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.46 times more return on investment than Bumrungrad Hospital. However, Airports of Thailand is 2.16 times less risky than Bumrungrad Hospital. It trades about -0.03 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.5 per unit of risk. If you would invest 6,175 in Airports of Thailand on August 29, 2024 and sell it today you would lose (50.00) from holding Airports of Thailand or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Airports of Thailand |
| Bumrungrad Hospital |
Airports and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Bumrungrad Hospital
The main advantage of trading using opposite Airports and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports 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.| Airports vs. Tata Steel Public | Airports vs. Thaifoods Group Public | Airports vs. TMT Steel Public | Airports vs. The Erawan Group |
| Bumrungrad Hospital vs. Bangkok Dusit Medical | Bumrungrad Hospital vs. CP ALL Public | Bumrungrad Hospital vs. Central Pattana Public | Bumrungrad Hospital vs. Airports of Thailand |
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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