Correlation Between Bumrungrad Hospital and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Guangdong 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 Guangdong 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 Guangdong Investment Limited, you can compare the effects of market volatilities on Bumrungrad Hospital and Guangdong 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Guangdong Investment.
Diversification Opportunities for Bumrungrad Hospital and Guangdong Investment
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bumrungrad and Guangdong is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Guangdong Investment go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Guangdong Investment
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to under-perform the Guangdong Investment. In addition to that, Bumrungrad Hospital is 1.41 times more volatile than Guangdong Investment Limited. It trades about -0.32 of its total potential returns per unit of risk. Guangdong Investment Limited is currently generating about -0.09 per unit of volatility. If you would invest 58.00 in Guangdong Investment Limited on August 30, 2024 and sell it today you would lose (3.00) from holding Guangdong Investment Limited or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Guangdong Investment Limited
Performance |
| Timeline |
| Bumrungrad Hospital |
| Guangdong Investment |
Bumrungrad Hospital and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Guangdong Investment
The main advantage of trading using opposite Bumrungrad Hospital and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Guangdong 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's 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 |
| Guangdong Investment vs. TTW Public | Guangdong Investment vs. Superior Plus Corp | Guangdong Investment vs. SIVERS SEMICONDUCTORS AB | Guangdong Investment vs. Identiv |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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