Correlation Between WW Grainger and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both WW Grainger 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 WW Grainger and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WW Grainger and Bumrungrad Hospital Public, you can compare the effects of market volatilities on WW Grainger 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 WW Grainger with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WW Grainger and Bumrungrad Hospital.
Diversification Opportunities for WW Grainger and Bumrungrad Hospital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GWW and Bumrungrad is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding WW Grainger and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and WW Grainger 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 WW Grainger 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 WW Grainger i.e., WW Grainger and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between WW Grainger and Bumrungrad Hospital
Assuming the 90 days horizon WW Grainger is expected to generate 0.61 times more return on investment than Bumrungrad Hospital. However, WW Grainger is 1.65 times less risky than Bumrungrad Hospital. It trades about 0.32 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.39 per unit of risk. If you would invest 99,773 in WW Grainger on September 1, 2024 and sell it today you would earn a total of 14,477 from holding WW Grainger or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
WW Grainger vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| WW Grainger |
| Bumrungrad Hospital |
WW Grainger and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WW Grainger and Bumrungrad Hospital
The main advantage of trading using opposite WW Grainger and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WW Grainger 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.| WW Grainger vs. Uber Technologies | WW Grainger vs. ASURE SOFTWARE | WW Grainger vs. UPDATE SOFTWARE | WW Grainger vs. NetSol Technologies |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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