Correlation Between Bumrungrad Hospital and Plan B
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Plan B 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 Plan B 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 Plan B Media, you can compare the effects of market volatilities on Bumrungrad Hospital and Plan B 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 Plan B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Plan B.
Diversification Opportunities for Bumrungrad Hospital and Plan B
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bumrungrad and Plan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Plan B Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plan B Media 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 Plan B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plan B Media has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Plan B go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Plan B
Assuming the 90 days horizon Bumrungrad Hospital Public is expected to generate 0.89 times more return on investment than Plan B. However, Bumrungrad Hospital Public is 1.12 times less risky than Plan B. It trades about -0.03 of its potential returns per unit of risk. Plan B Media is currently generating about -0.03 per unit of risk. If you would invest 24,846 in Bumrungrad Hospital Public on August 29, 2024 and sell it today you would lose (4,446) from holding Bumrungrad Hospital Public or give up 17.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Plan B Media
Performance |
| Timeline |
| Bumrungrad Hospital |
| Plan B Media |
Bumrungrad Hospital and Plan B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Plan B
The main advantage of trading using opposite Bumrungrad Hospital and Plan B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Plan B 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 Plan B will offset losses from the drop in Plan B's long position.| Bumrungrad Hospital vs. Chularat Hospital Public | Bumrungrad Hospital vs. Bangkok Chain Hospital | Bumrungrad Hospital vs. Bangkok Dusit Medical | Bumrungrad Hospital vs. Rajthanee Hospital Public |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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