Correlation Between Bumrungrad Hospital and Principal Capital
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Principal Capital 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 Principal Capital 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 Principal Capital Public, you can compare the effects of market volatilities on Bumrungrad Hospital and Principal Capital 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 Principal Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Principal Capital.
Diversification Opportunities for Bumrungrad Hospital and Principal Capital
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bumrungrad and Principal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Principal Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Capital Public 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 Principal Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Capital Public has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Principal Capital go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Principal Capital
Assuming the 90 days horizon Bumrungrad Hospital is expected to generate 78.99 times less return on investment than Principal Capital. But when comparing it to its historical volatility, Bumrungrad Hospital Public is 29.49 times less risky than Principal Capital. It trades about 0.01 of its potential returns per unit of risk. Principal Capital Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Principal Capital Public on September 2, 2024 and sell it today you would lose (282.00) from holding Principal Capital Public or give up 48.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Principal Capital Public
Performance |
| Timeline |
| Bumrungrad Hospital |
| Principal Capital Public |
Bumrungrad Hospital and Principal Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Principal Capital
The main advantage of trading using opposite Bumrungrad Hospital and Principal Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Principal Capital 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 Principal Capital will offset losses from the drop in Principal Capital's long position.| Bumrungrad Hospital vs. AP Public | Bumrungrad Hospital vs. Advanced Information Technology | Bumrungrad Hospital vs. AJ Plast Public | Bumrungrad Hospital vs. Berli Jucker Public |
| Principal Capital vs. AP Public | Principal Capital vs. Advanced Information Technology | Principal Capital vs. AJ Plast Public | Principal Capital vs. Berli Jucker 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 Valuation module to check real value of public entities based on technical and fundamental data.
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