Correlation Between Bumrungrad Hospital and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Ebro Foods 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 Ebro Foods 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 Ebro Foods SA, you can compare the effects of market volatilities on Bumrungrad Hospital and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Ebro Foods.
Diversification Opportunities for Bumrungrad Hospital and Ebro Foods
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bumrungrad and Ebro is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Ebro Foods go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Ebro Foods
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 7.2 times more return on investment than Ebro Foods. However, Bumrungrad Hospital is 7.2 times more volatile than Ebro Foods SA. It trades about 0.07 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.01 per unit of risk. If you would invest 160.00 in Bumrungrad Hospital Public on August 31, 2024 and sell it today you would earn a total of 385.00 from holding Bumrungrad Hospital Public or generate 240.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Ebro Foods SA
Performance |
| Timeline |
| Bumrungrad Hospital |
| Ebro Foods SA |
Bumrungrad Hospital and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Ebro Foods
The main advantage of trading using opposite Bumrungrad Hospital and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Charoen Pokphand Foods | Bumrungrad Hospital vs. Superior Plus Corp |
| Ebro Foods vs. Danone SA | Ebro Foods vs. Superior Plus Corp | Ebro Foods vs. NMI Holdings | Ebro Foods vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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