Correlation Between Bumrungrad Hospital and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and CapitaLand Investment 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 CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on Bumrungrad Hospital and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and CapitaLand Investment.
Diversification Opportunities for Bumrungrad Hospital and CapitaLand Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bumrungrad and CapitaLand is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and CapitaLand Investment
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to under-perform the CapitaLand Investment. In addition to that, Bumrungrad Hospital is 1.56 times more volatile than CapitaLand Investment Limited. It trades about -0.15 of its total potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.04 per unit of volatility. If you would invest 196.00 in CapitaLand Investment Limited on September 12, 2024 and sell it today you would lose (9.00) from holding CapitaLand Investment Limited or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Bumrungrad Hospital |
| CapitaLand Investment |
Bumrungrad Hospital and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and CapitaLand Investment
The main advantage of trading using opposite Bumrungrad Hospital and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Universal Health Services | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. SIVERS SEMICONDUCTORS AB |
| CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. SIVERS SEMICONDUCTORS AB | CapitaLand Investment vs. Reliance Steel Aluminum | CapitaLand Investment vs. CHINA HUARONG ENERHD 50 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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