Correlation Between Bangkok Bank and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank 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 Bangkok Bank and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Bank Public and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Bangkok Bank 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 Bangkok Bank with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Bumrungrad Hospital.
Diversification Opportunities for Bangkok Bank and Bumrungrad Hospital
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bangkok and Bumrungrad is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Bangkok Bank 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 Bangkok Bank Public 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 Bangkok Bank i.e., Bangkok Bank and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Bangkok Bank and Bumrungrad Hospital
Assuming the 90 days trading horizon Bangkok Bank Public is expected to generate 0.75 times more return on investment than Bumrungrad Hospital. However, Bangkok Bank Public is 1.33 times less risky than Bumrungrad Hospital. It trades about 0.07 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.06 per unit of risk. If you would invest 13,506 in Bangkok Bank Public on September 1, 2024 and sell it today you would earn a total of 1,444 from holding Bangkok Bank Public or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Bangkok Bank Public |
| Bumrungrad Hospital |
Bangkok Bank and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Bumrungrad Hospital
The main advantage of trading using opposite Bangkok Bank and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank 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.| Bangkok Bank vs. SCB X Public | Bangkok Bank vs. Kasikornbank Public | Bangkok Bank vs. PTT Public | Bangkok Bank vs. The Siam Cement |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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