Correlation Between SBM OFFSHORE and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE 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 SBM OFFSHORE and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Bumrungrad Hospital Public, you can compare the effects of market volatilities on SBM OFFSHORE 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 SBM OFFSHORE with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Bumrungrad Hospital.
Diversification Opportunities for SBM OFFSHORE and Bumrungrad Hospital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Bumrungrad is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE i.e., SBM OFFSHORE and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Bumrungrad Hospital
Assuming the 90 days trading horizon SBM OFFSHORE is expected to under-perform the Bumrungrad Hospital. But the stock apears to be less risky and, when comparing its historical volatility, SBM OFFSHORE is 1.14 times less risky than Bumrungrad Hospital. The stock trades about -0.08 of its potential returns per unit of risk. The Bumrungrad Hospital Public is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Bumrungrad Hospital Public on September 13, 2024 and sell it today you would lose (20.00) from holding Bumrungrad Hospital Public or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| SBM OFFSHORE |
| Bumrungrad Hospital |
SBM OFFSHORE and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Bumrungrad Hospital
The main advantage of trading using opposite SBM OFFSHORE and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE 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.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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