Correlation Between Bumrungrad Hospital and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Bumrungrad Hospital and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Arrow Electronics.
Diversification Opportunities for Bumrungrad Hospital and Arrow Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bumrungrad and Arrow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Arrow Electronics go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Arrow Electronics
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to under-perform the Arrow Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Bumrungrad Hospital Public is 1.05 times less risky than Arrow Electronics. The stock trades about -0.4 of its potential returns per unit of risk. The Arrow Electronics is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 12,300 in Arrow Electronics on August 27, 2024 and sell it today you would lose (1,000.00) from holding Arrow Electronics or give up 8.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Arrow Electronics
Performance |
| Timeline |
| Bumrungrad Hospital |
| Arrow Electronics |
Bumrungrad Hospital and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Arrow Electronics
The main advantage of trading using opposite Bumrungrad Hospital and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. NMI Holdings | Bumrungrad Hospital vs. Origin Agritech |
| Arrow Electronics vs. Cleanaway Waste Management | Arrow Electronics vs. Coor Service Management | Arrow Electronics vs. Ares Management Corp | Arrow Electronics vs. CEOTRONICS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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