Correlation Between Bumrungrad Hospital and Thonburi Medical
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Thonburi Medical 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 Bumrungrad Hospital and Thonburi Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumrungrad Hospital Public and Thonburi Medical Centre, you can compare the effects of market volatilities on Bumrungrad Hospital and Thonburi Medical 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 Bumrungrad Hospital with a short position of Thonburi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Thonburi Medical.
Diversification Opportunities for Bumrungrad Hospital and Thonburi Medical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bumrungrad and Thonburi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Thonburi Medical Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thonburi Medical Centre and Bumrungrad Hospital 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 Bumrungrad Hospital Public are associated (or correlated) with Thonburi Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thonburi Medical Centre has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Thonburi Medical go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Thonburi Medical
Assuming the 90 days horizon Bumrungrad Hospital is expected to generate 187.21 times less return on investment than Thonburi Medical. But when comparing it to its historical volatility, Bumrungrad Hospital Public is 29.45 times less risky than Thonburi Medical. It trades about 0.01 of its potential returns per unit of risk. Thonburi Medical Centre is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,954 in Thonburi Medical Centre on August 25, 2024 and sell it today you would earn a total of 746.00 from holding Thonburi Medical Centre or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Thonburi Medical Centre
Performance |
| Timeline |
| Bumrungrad Hospital |
| Thonburi Medical Centre |
Bumrungrad Hospital and Thonburi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Thonburi Medical
The main advantage of trading using opposite Bumrungrad Hospital and Thonburi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Thonburi Medical 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 Thonburi Medical will offset losses from the drop in Thonburi Medical's long position.| Bumrungrad Hospital vs. Chularat Hospital Public | Bumrungrad Hospital vs. Ekachai Medical Care | Bumrungrad Hospital vs. Bangkok Chain Hospital | Bumrungrad Hospital vs. Srivichaivejvivat Public |
| Thonburi Medical vs. Chularat Hospital Public | Thonburi Medical vs. Ekachai Medical Care | Thonburi Medical vs. Bangkok Chain Hospital | Thonburi Medical vs. Srivichaivejvivat 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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