Correlation Between GAMESTOP and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and Bumrungrad 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 GAMESTOP and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and Bumrungrad Hospital Public, you can compare the effects of market volatilities on GAMESTOP and Bumrungrad 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 GAMESTOP with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and Bumrungrad Hospital.
Diversification Opportunities for GAMESTOP and Bumrungrad Hospital
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMESTOP and Bumrungrad is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and GAMESTOP 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 GAMESTOP are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of GAMESTOP i.e., GAMESTOP and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between GAMESTOP and Bumrungrad Hospital
Assuming the 90 days trading horizon GAMESTOP is expected to generate 1.29 times more return on investment than Bumrungrad Hospital. However, GAMESTOP is 1.29 times more volatile than Bumrungrad Hospital Public. It trades about 0.28 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.35 per unit of risk. If you would invest 2,047 in GAMESTOP on September 4, 2024 and sell it today you would earn a total of 553.00 from holding GAMESTOP or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GAMESTOP vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| GAMESTOP |
| Bumrungrad Hospital |
GAMESTOP and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and Bumrungrad Hospital
The main advantage of trading using opposite GAMESTOP and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, Bumrungrad 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.The idea behind GAMESTOP and Bumrungrad Hospital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. NMI Holdings | Bumrungrad Hospital vs. Origin Agritech | Bumrungrad Hospital vs. SIVERS SEMICONDUCTORS AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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