Correlation Between Chularat Hospital and Mega Lifesciences
Can any of the company-specific risk be diversified away by investing in both Chularat Hospital and Mega Lifesciences 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 Chularat Hospital and Mega Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chularat Hospital Public and Mega Lifesciences Public, you can compare the effects of market volatilities on Chularat Hospital and Mega Lifesciences 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 Chularat Hospital with a short position of Mega Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chularat Hospital and Mega Lifesciences.
Diversification Opportunities for Chularat Hospital and Mega Lifesciences
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chularat and Mega is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chularat Hospital Public and Mega Lifesciences Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Lifesciences Public and Chularat 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 Chularat Hospital Public are associated (or correlated) with Mega Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Lifesciences Public has no effect on the direction of Chularat Hospital i.e., Chularat Hospital and Mega Lifesciences go up and down completely randomly.
Pair Corralation between Chularat Hospital and Mega Lifesciences
Assuming the 90 days trading horizon Chularat Hospital Public is expected to generate 1.79 times more return on investment than Mega Lifesciences. However, Chularat Hospital is 1.79 times more volatile than Mega Lifesciences Public. It trades about -0.16 of its potential returns per unit of risk. Mega Lifesciences Public is currently generating about -0.34 per unit of risk. If you would invest 284.00 in Chularat Hospital Public on August 25, 2024 and sell it today you would lose (24.00) from holding Chularat Hospital Public or give up 8.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chularat Hospital Public vs. Mega Lifesciences Public
Performance |
| Timeline |
| Chularat Hospital Public |
| Mega Lifesciences Public |
Chularat Hospital and Mega Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chularat Hospital and Mega Lifesciences
The main advantage of trading using opposite Chularat Hospital and Mega Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chularat Hospital position performs unexpectedly, Mega Lifesciences 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 Mega Lifesciences will offset losses from the drop in Mega Lifesciences' long position.| Chularat Hospital vs. Bangkok Chain Hospital | Chularat Hospital vs. Bangkok Dusit Medical | Chularat Hospital vs. Bumrungrad Hospital Public | Chularat Hospital vs. AP Public |
| Mega Lifesciences vs. Chularat Hospital Public | Mega Lifesciences vs. Ekachai Medical Care | Mega Lifesciences vs. Bangkok Chain Hospital | Mega Lifesciences vs. Srivichaivejvivat Public |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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