Correlation Between Guangdong Investment and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment 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 Guangdong Investment and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Guangdong Investment 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 Guangdong Investment with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Bumrungrad Hospital.
Diversification Opportunities for Guangdong Investment and Bumrungrad Hospital
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangdong and Bumrungrad is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Guangdong Investment 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 Guangdong Investment Limited 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 Guangdong Investment i.e., Guangdong Investment and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Guangdong Investment and Bumrungrad Hospital
Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 1.34 times more return on investment than Bumrungrad Hospital. However, Guangdong Investment is 1.34 times more volatile than Bumrungrad Hospital Public. It trades about 0.14 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about 0.08 per unit of risk. If you would invest 23.00 in Guangdong Investment Limited on August 29, 2024 and sell it today you would earn a total of 32.00 from holding Guangdong Investment Limited or generate 139.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Guangdong Investment |
| Bumrungrad Hospital |
Guangdong Investment and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Bumrungrad Hospital
The main advantage of trading using opposite Guangdong Investment and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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.| Guangdong Investment vs. United Utilities Group | Guangdong Investment vs. TTW Public | Guangdong Investment vs. Superior Plus Corp | Guangdong Investment vs. SIVERS SEMICONDUCTORS AB |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Charoen Pokphand Foods | Bumrungrad Hospital vs. Superior Plus Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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