Correlation Between Bumrungrad Hospital and Richter Gedeon
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Richter Gedeon 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 Richter Gedeon 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 Richter Gedeon Vegyszeti, you can compare the effects of market volatilities on Bumrungrad Hospital and Richter Gedeon 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 Richter Gedeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Richter Gedeon.
Diversification Opportunities for Bumrungrad Hospital and Richter Gedeon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bumrungrad and Richter is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Richter Gedeon Vegyszeti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richter Gedeon Vegyszeti 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 Richter Gedeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richter Gedeon Vegyszeti has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Richter Gedeon go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Richter Gedeon
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 3.49 times more return on investment than Richter Gedeon. However, Bumrungrad Hospital is 3.49 times more volatile than Richter Gedeon Vegyszeti. It trades about 0.07 of its potential returns per unit of risk. Richter Gedeon Vegyszeti is currently generating about 0.02 per unit of risk. If you would invest 151.00 in Bumrungrad Hospital Public on August 31, 2024 and sell it today you would earn a total of 399.00 from holding Bumrungrad Hospital Public or generate 264.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Richter Gedeon Vegyszeti
Performance |
| Timeline |
| Bumrungrad Hospital |
| Richter Gedeon Vegyszeti |
Bumrungrad Hospital and Richter Gedeon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Richter Gedeon
The main advantage of trading using opposite Bumrungrad Hospital and Richter Gedeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Richter Gedeon 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 Richter Gedeon will offset losses from the drop in Richter Gedeon's long position.| Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Charoen Pokphand Foods | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. Origin Agritech |
| Richter Gedeon vs. Eisai Co | Richter Gedeon vs. Shionogi Co | Richter Gedeon vs. Superior Plus Corp | Richter Gedeon 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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