Correlation Between Bangkok Chain and Dental Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and Dental Public 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 Chain and Dental Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Chain Hospital and Dental Public, you can compare the effects of market volatilities on Bangkok Chain and Dental Public 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 Chain with a short position of Dental Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and Dental Public.
Diversification Opportunities for Bangkok Chain and Dental Public
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Dental is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and Dental Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dental Public and Bangkok Chain 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 Chain Hospital are associated (or correlated) with Dental Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dental Public has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and Dental Public go up and down completely randomly.
Pair Corralation between Bangkok Chain and Dental Public
Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to generate 1.41 times more return on investment than Dental Public. However, Bangkok Chain is 1.41 times more volatile than Dental Public. It trades about 0.06 of its potential returns per unit of risk. Dental Public is currently generating about 0.04 per unit of risk. If you would invest 1,984 in Bangkok Chain Hospital on September 4, 2024 and sell it today you would lose (304.00) from holding Bangkok Chain Hospital or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bangkok Chain Hospital vs. Dental Public
Performance |
| Timeline |
| Bangkok Chain Hospital |
| Dental Public |
Bangkok Chain and Dental Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Chain and Dental Public
The main advantage of trading using opposite Bangkok Chain and Dental Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain position performs unexpectedly, Dental Public 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 Dental Public will offset losses from the drop in Dental Public's long position.| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Chularat Hospital Public | Bangkok Chain vs. Nonthavej Hospital Public |
| Dental Public vs. Humanica Public | Dental Public vs. After You Public | Dental Public vs. Chularat Hospital Public | Dental Public vs. Comanche International Public |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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