Correlation Between Bumrungrad Hospital and Nippon Steel
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Nippon Steel 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 Nippon Steel 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 Nippon Steel, you can compare the effects of market volatilities on Bumrungrad Hospital and Nippon Steel 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 Nippon Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Nippon Steel.
Diversification Opportunities for Bumrungrad Hospital and Nippon Steel
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bumrungrad and Nippon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Nippon Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Steel 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 Nippon Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Steel has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Nippon Steel go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Nippon Steel
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 1.18 times more return on investment than Nippon Steel. However, Bumrungrad Hospital is 1.18 times more volatile than Nippon Steel. It trades about -0.04 of its potential returns per unit of risk. Nippon Steel is currently generating about -0.26 per unit of risk. If you would invest 466.00 in Bumrungrad Hospital Public on January 24, 2025 and sell it today you would lose (12.00) from holding Bumrungrad Hospital Public or give up 2.58% 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. Nippon Steel
Performance |
| Timeline |
| Bumrungrad Hospital |
| Nippon Steel |
Bumrungrad Hospital and Nippon Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Nippon Steel
The main advantage of trading using opposite Bumrungrad Hospital and Nippon Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Nippon Steel 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 Nippon Steel will offset losses from the drop in Nippon Steel's long position.| Bumrungrad Hospital vs. HCA Healthcare | Bumrungrad Hospital vs. Fresenius SE Co | Bumrungrad Hospital vs. Fresenius Medical Care | Bumrungrad Hospital vs. Ramsay Health Care |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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