Correlation Between Bangkok Sheet and Ramkhamhaeng Hospital

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Can any of the company-specific risk be diversified away by investing in both Bangkok Sheet and Ramkhamhaeng 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 Bangkok Sheet and Ramkhamhaeng Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Sheet Metal and Ramkhamhaeng Hospital Public, you can compare the effects of market volatilities on Bangkok Sheet and Ramkhamhaeng 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 Bangkok Sheet with a short position of Ramkhamhaeng Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Sheet and Ramkhamhaeng Hospital.

Diversification Opportunities for Bangkok Sheet and Ramkhamhaeng Hospital

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bangkok and Ramkhamhaeng is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Sheet Metal and Ramkhamhaeng Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramkhamhaeng Hospital and Bangkok Sheet 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 Sheet Metal are associated (or correlated) with Ramkhamhaeng Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramkhamhaeng Hospital has no effect on the direction of Bangkok Sheet i.e., Bangkok Sheet and Ramkhamhaeng Hospital go up and down completely randomly.

Pair Corralation between Bangkok Sheet and Ramkhamhaeng Hospital

Assuming the 90 days horizon Bangkok Sheet Metal is expected to under-perform the Ramkhamhaeng Hospital. In addition to that, Bangkok Sheet is 1.03 times more volatile than Ramkhamhaeng Hospital Public. It trades about -0.2 of its total potential returns per unit of risk. Ramkhamhaeng Hospital Public is currently generating about -0.1 per unit of volatility. If you would invest  2,210  in Ramkhamhaeng Hospital Public on October 20, 2024 and sell it today you would lose (40.00) from holding Ramkhamhaeng Hospital Public or give up 1.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bangkok Sheet Metal  vs.  Ramkhamhaeng Hospital Public

 Performance 
       Timeline  
Bangkok Sheet Metal 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bangkok Sheet Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Ramkhamhaeng Hospital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ramkhamhaeng Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Bangkok Sheet and Ramkhamhaeng Hospital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bangkok Sheet and Ramkhamhaeng Hospital

The main advantage of trading using opposite Bangkok Sheet and Ramkhamhaeng Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Sheet position performs unexpectedly, Ramkhamhaeng 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 Ramkhamhaeng Hospital will offset losses from the drop in Ramkhamhaeng Hospital's long position.
The idea behind Bangkok Sheet Metal and Ramkhamhaeng Hospital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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