Correlation Between Bumrungrad Hospital and Rajthanee Hospital
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Rajthanee 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 Bumrungrad Hospital and Rajthanee Hospital 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 Rajthanee Hospital Public, you can compare the effects of market volatilities on Bumrungrad Hospital and Rajthanee 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 Bumrungrad Hospital with a short position of Rajthanee Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Rajthanee Hospital.
Diversification Opportunities for Bumrungrad Hospital and Rajthanee Hospital
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bumrungrad and Rajthanee is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Rajthanee Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajthanee Hospital 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 Rajthanee Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajthanee Hospital Public has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Rajthanee Hospital go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Rajthanee Hospital
Assuming the 90 days horizon Bumrungrad Hospital Public is expected to under-perform the Rajthanee Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Bumrungrad Hospital Public is 35.5 times less risky than Rajthanee Hospital. The stock trades about -0.03 of its potential returns per unit of risk. The Rajthanee Hospital Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,761 in Rajthanee Hospital Public on August 29, 2024 and sell it today you would lose (501.00) from holding Rajthanee Hospital Public or give up 18.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Rajthanee Hospital Public
Performance |
| Timeline |
| Bumrungrad Hospital |
| Rajthanee Hospital Public |
Bumrungrad Hospital and Rajthanee Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Rajthanee Hospital
The main advantage of trading using opposite Bumrungrad Hospital and Rajthanee Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Rajthanee 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 Rajthanee Hospital will offset losses from the drop in Rajthanee Hospital'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 |
| Rajthanee Hospital vs. Chularat Hospital Public | Rajthanee Hospital vs. Bangkok Chain Hospital | Rajthanee Hospital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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