Correlation Between Ekachai Medical and Ramkhamhaeng Hospital
Can any of the company-specific risk be diversified away by investing in both Ekachai Medical and Ramkhamhaeng Hospital 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 Ekachai Medical and Ramkhamhaeng Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekachai Medical Care and Ramkhamhaeng Hospital Public, you can compare the effects of market volatilities on Ekachai Medical and Ramkhamhaeng Hospital 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 Ekachai Medical with a short position of Ramkhamhaeng Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekachai Medical and Ramkhamhaeng Hospital.
Diversification Opportunities for Ekachai Medical and Ramkhamhaeng Hospital
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ekachai and Ramkhamhaeng is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ekachai Medical Care and Ramkhamhaeng Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramkhamhaeng Hospital and Ekachai Medical 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 Ekachai Medical Care are associated (or correlated) with Ramkhamhaeng Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramkhamhaeng Hospital has no effect on the direction of Ekachai Medical i.e., Ekachai Medical and Ramkhamhaeng Hospital go up and down completely randomly.
Pair Corralation between Ekachai Medical and Ramkhamhaeng Hospital
Assuming the 90 days trading horizon Ekachai Medical Care is expected to under-perform the Ramkhamhaeng Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Ekachai Medical Care is 1.09 times less risky than Ramkhamhaeng Hospital. The stock trades about -0.11 of its potential returns per unit of risk. The Ramkhamhaeng Hospital Public is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 2,365 in Ramkhamhaeng Hospital Public on August 29, 2024 and sell it today you would lose (45.00) from holding Ramkhamhaeng Hospital Public or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekachai Medical Care vs. Ramkhamhaeng Hospital Public
Performance |
| Timeline |
| Ekachai Medical Care |
| Ramkhamhaeng Hospital |
Ekachai Medical and Ramkhamhaeng Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekachai Medical and Ramkhamhaeng Hospital
The main advantage of trading using opposite Ekachai Medical and Ramkhamhaeng Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekachai Medical position performs unexpectedly, Ramkhamhaeng Hospital 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 Ramkhamhaeng Hospital will offset losses from the drop in Ramkhamhaeng Hospital's long position.| Ekachai Medical vs. Chularat Hospital Public | Ekachai Medical vs. Bangkok Chain Hospital | Ekachai Medical vs. Bangkok Dusit Medical | Ekachai Medical vs. Rajthanee Hospital 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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