Correlation Between Bumrungrad Hospital and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Virtus 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 Virtus 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 Virtus Investment Partners, you can compare the effects of market volatilities on Bumrungrad Hospital and Virtus 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Virtus Investment.
Diversification Opportunities for Bumrungrad Hospital and Virtus Investment
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bumrungrad and Virtus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Virtus Investment go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Virtus Investment
Assuming the 90 days trading horizon Bumrungrad Hospital Public is expected to under-perform the Virtus Investment. But the stock apears to be less risky and, when comparing its historical volatility, Bumrungrad Hospital Public is 1.03 times less risky than Virtus Investment. The stock trades about -0.4 of its potential returns per unit of risk. The Virtus Investment Partners is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 18,990 in Virtus Investment Partners on August 27, 2024 and sell it today you would earn a total of 4,210 from holding Virtus Investment Partners or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumrungrad Hospital Public vs. Virtus Investment Partners
Performance |
| Timeline |
| Bumrungrad Hospital |
| Virtus Investment |
Bumrungrad Hospital and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumrungrad Hospital and Virtus Investment
The main advantage of trading using opposite Bumrungrad Hospital and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Virtus 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 Virtus Investment will offset losses from the drop in Virtus Investment'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 |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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