Correlation Between Ekachai Medical and Thai Nakarin
Can any of the company-specific risk be diversified away by investing in both Ekachai Medical and Thai Nakarin 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 Thai Nakarin 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 Thai Nakarin Hospital, you can compare the effects of market volatilities on Ekachai Medical and Thai Nakarin 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 Thai Nakarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekachai Medical and Thai Nakarin.
Diversification Opportunities for Ekachai Medical and Thai Nakarin
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ekachai and Thai is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ekachai Medical Care and Thai Nakarin Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nakarin 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 Thai Nakarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nakarin Hospital has no effect on the direction of Ekachai Medical i.e., Ekachai Medical and Thai Nakarin go up and down completely randomly.
Pair Corralation between Ekachai Medical and Thai Nakarin
Assuming the 90 days trading horizon Ekachai Medical Care is expected to under-perform the Thai Nakarin. In addition to that, Ekachai Medical is 1.54 times more volatile than Thai Nakarin Hospital. It trades about -0.06 of its total potential returns per unit of risk. Thai Nakarin Hospital is currently generating about 0.18 per unit of volatility. If you would invest 3,519 in Thai Nakarin Hospital on September 12, 2024 and sell it today you would earn a total of 231.00 from holding Thai Nakarin Hospital or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekachai Medical Care vs. Thai Nakarin Hospital
Performance |
| Timeline |
| Ekachai Medical Care |
| Thai Nakarin Hospital |
Ekachai Medical and Thai Nakarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekachai Medical and Thai Nakarin
The main advantage of trading using opposite Ekachai Medical and Thai Nakarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekachai Medical position performs unexpectedly, Thai Nakarin 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 Thai Nakarin will offset losses from the drop in Thai Nakarin'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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