Correlation Between AP Public and Mahachai Hospital
Can any of the company-specific risk be diversified away by investing in both AP Public 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 AP Public and Mahachai Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Mahachai Hospital Public, you can compare the effects of market volatilities on AP Public 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 AP Public with a short position of Mahachai Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Mahachai Hospital.
Diversification Opportunities for AP Public and Mahachai Hospital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AP Public and Mahachai is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AP Public 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 AP Public 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 AP Public 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 AP Public i.e., AP Public and Mahachai Hospital go up and down completely randomly.
Pair Corralation between AP Public and Mahachai Hospital
Assuming the 90 days horizon AP Public is expected to under-perform the Mahachai Hospital. But the stock apears to be less risky and, when comparing its historical volatility, AP Public is 28.43 times less risky than Mahachai Hospital. The stock trades about -0.01 of its potential returns per unit of risk. The Mahachai Hospital Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,998 in Mahachai Hospital Public on September 2, 2024 and sell it today you would lose (123.00) from holding Mahachai Hospital Public or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Mahachai Hospital Public
Performance |
| Timeline |
| AP Public |
| Mahachai Hospital Public |
AP Public and Mahachai Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Mahachai Hospital
The main advantage of trading using opposite AP Public and Mahachai Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public 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.The idea behind AP Public and Mahachai Hospital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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