Correlation Between Bumrungrad Hospital and Air New
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Air New 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 Air New 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 Air New Zealand, you can compare the effects of market volatilities on Bumrungrad Hospital and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Air New.
Diversification Opportunities for Bumrungrad Hospital and Air New
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumrungrad and Air is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Air New go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Air New
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 4.22 times more return on investment than Air New. However, Bumrungrad Hospital is 4.22 times more volatile than Air New Zealand. It trades about 0.08 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.01 per unit of risk. If you would invest 80.00 in Bumrungrad Hospital Public on September 3, 2024 and sell it today you would earn a total of 480.00 from holding Bumrungrad Hospital Public or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Air New Zealand
Performance |
| Timeline |
| Bumrungrad Hospital |
| Air New Zealand |
Bumrungrad Hospital and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Air New
The main advantage of trading using opposite Bumrungrad Hospital and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Select Medical Holdings | Bumrungrad Hospital vs. Medicover 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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