Correlation Between Bumrungrad Hospital and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Bumrungrad Hospital and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Harmony Gold.
Diversification Opportunities for Bumrungrad Hospital and Harmony Gold
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bumrungrad and Harmony is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Harmony Gold go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Harmony Gold
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 2.24 times more return on investment than Harmony Gold. However, Bumrungrad Hospital is 2.24 times more volatile than Harmony Gold Mining. It trades about 0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.11 per unit of risk. If you would invest 164.00 in Bumrungrad Hospital Public on September 12, 2024 and sell it today you would earn a total of 386.00 from holding Bumrungrad Hospital Public or generate 235.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Harmony Gold Mining
Performance |
| Timeline |
| Bumrungrad Hospital |
| Harmony Gold Mining |
Bumrungrad Hospital and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Harmony Gold
The main advantage of trading using opposite Bumrungrad Hospital and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold'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 |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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