Correlation Between Spirent Communications and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and Bumrungrad 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 Spirent Communications and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Spirent Communications and Bumrungrad 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 Spirent Communications with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Bumrungrad Hospital.
Diversification Opportunities for Spirent Communications and Bumrungrad Hospital
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spirent and Bumrungrad is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of Spirent Communications i.e., Spirent Communications and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Spirent Communications and Bumrungrad Hospital
Assuming the 90 days horizon Spirent Communications is expected to generate 24.31 times less return on investment than Bumrungrad Hospital. But when comparing it to its historical volatility, Spirent Communications plc is 1.63 times less risky than Bumrungrad Hospital. It trades about 0.01 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Bumrungrad Hospital Public on September 13, 2024 and sell it today you would earn a total of 475.00 from holding Bumrungrad Hospital Public or generate 593.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Spirent Communications |
| Bumrungrad Hospital |
Spirent Communications and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Bumrungrad Hospital
The main advantage of trading using opposite Spirent Communications and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, Bumrungrad 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| Spirent Communications vs. Superior Plus Corp | Spirent Communications vs. SIVERS SEMICONDUCTORS AB | Spirent Communications vs. Norsk Hydro ASA | Spirent Communications vs. Reliance Steel Aluminum |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Universal Health Services | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. SIVERS SEMICONDUCTORS AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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