Correlation Between Bangkok Chain and Chularat Hospital
Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and Chularat 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 Chain and Chularat Hospital 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 Chularat Hospital Public, you can compare the effects of market volatilities on Bangkok Chain and Chularat 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 Chain with a short position of Chularat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and Chularat Hospital.
Diversification Opportunities for Bangkok Chain and Chularat Hospital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Chularat is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and Chularat Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chularat Hospital 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 Chularat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chularat Hospital Public has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and Chularat Hospital go up and down completely randomly.
Pair Corralation between Bangkok Chain and Chularat Hospital
Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to under-perform the Chularat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Chain Hospital is 1.37 times less risky than Chularat Hospital. The stock trades about -0.34 of its potential returns per unit of risk. The Chularat Hospital Public is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Chularat Hospital Public on August 28, 2024 and sell it today you would lose (28.00) from holding Chularat Hospital Public or give up 9.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Chain Hospital vs. Chularat Hospital Public
Performance |
| Timeline |
| Bangkok Chain Hospital |
| Chularat Hospital Public |
Bangkok Chain and Chularat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Chain and Chularat Hospital
The main advantage of trading using opposite Bangkok Chain and Chularat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain position performs unexpectedly, Chularat 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 Chularat Hospital will offset losses from the drop in Chularat Hospital's long position.| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Chularat Hospital Public | Bangkok Chain vs. Bumrungrad Hospital Public | Bangkok Chain vs. Advanced Info Service |
| Chularat Hospital vs. Bangkok Chain Hospital | Chularat Hospital vs. Bangkok Dusit Medical | Chularat Hospital vs. Bumrungrad Hospital Public | Chularat Hospital vs. AP 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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