Correlation Between BASF SE and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both BASF SE 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 BASF SE and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and Bumrungrad Hospital Public, you can compare the effects of market volatilities on BASF SE 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 BASF SE with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and Bumrungrad Hospital.
Diversification Opportunities for BASF SE and Bumrungrad Hospital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BASF and Bumrungrad is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and BASF SE 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 BASF SE 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 BASF SE i.e., BASF SE and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between BASF SE and Bumrungrad Hospital
Assuming the 90 days trading horizon BASF SE is expected to generate 15.07 times less return on investment than Bumrungrad Hospital. But when comparing it to its historical volatility, BASF SE is 2.84 times less risky than Bumrungrad Hospital. It trades about 0.01 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Bumrungrad Hospital Public on September 3, 2024 and sell it today you would earn a total of 480.00 from holding Bumrungrad Hospital Public or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASF SE vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| BASF SE |
| Bumrungrad Hospital |
BASF SE and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and Bumrungrad Hospital
The main advantage of trading using opposite BASF SE and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE 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.| BASF SE vs. Bumrungrad Hospital Public | BASF SE vs. Cardinal Health | BASF SE vs. SHIP HEALTHCARE HLDGINC | BASF SE vs. Scientific Games |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Select Medical Holdings | Bumrungrad Hospital vs. Medicover AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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