Correlation Between Bangkok Dusit and Mega Lifesciences
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Mega Lifesciences 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 Dusit and Mega Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Dusit Medical and Mega Lifesciences Public, you can compare the effects of market volatilities on Bangkok Dusit and Mega Lifesciences 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 Dusit with a short position of Mega Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Mega Lifesciences.
Diversification Opportunities for Bangkok Dusit and Mega Lifesciences
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and Mega is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Mega Lifesciences Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Lifesciences Public and Bangkok Dusit 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 Dusit Medical are associated (or correlated) with Mega Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Lifesciences Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Mega Lifesciences go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Mega Lifesciences
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.82 times more return on investment than Mega Lifesciences. However, Bangkok Dusit Medical is 1.22 times less risky than Mega Lifesciences. It trades about -0.02 of its potential returns per unit of risk. Mega Lifesciences Public is currently generating about -0.05 per unit of risk. If you would invest 2,766 in Bangkok Dusit Medical on November 5, 2024 and sell it today you would lose (416.00) from holding Bangkok Dusit Medical or give up 15.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Mega Lifesciences Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Mega Lifesciences Public |
Bangkok Dusit and Mega Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Mega Lifesciences
The main advantage of trading using opposite Bangkok Dusit and Mega Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Mega Lifesciences 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 Mega Lifesciences will offset losses from the drop in Mega Lifesciences' long position.| Bangkok Dusit vs. Bumrungrad Hospital PCL | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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