Correlation Between Bumrungrad Hospital and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor, you can compare the effects of market volatilities on Bumrungrad Hospital and Tower Semiconductor 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 Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Tower Semiconductor.
Diversification Opportunities for Bumrungrad Hospital and Tower Semiconductor
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumrungrad and Tower is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor 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 Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Tower Semiconductor go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Tower Semiconductor
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to generate 3.21 times more return on investment than Tower Semiconductor. However, Bumrungrad Hospital is 3.21 times more volatile than Tower Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Tower Semiconductor is currently generating about 0.11 per unit of risk. If you would invest 173.00 in Bumrungrad Hospital Public on August 27, 2024 and sell it today you would earn a total of 387.00 from holding Bumrungrad Hospital Public or generate 223.7% 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. Tower Semiconductor
Performance |
| Timeline |
| Bumrungrad Hospital |
| Tower Semiconductor |
Bumrungrad Hospital and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Tower Semiconductor
The main advantage of trading using opposite Bumrungrad Hospital and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. NMI Holdings | Bumrungrad Hospital vs. Origin Agritech |
| Tower Semiconductor vs. SALESFORCE INC CDR | Tower Semiconductor vs. Nordic Semiconductor ASA | Tower Semiconductor vs. Auto Trader Group | Tower Semiconductor vs. CARSALESCOM |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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