Correlation Between Japan Asia and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Bumrungrad Hospital.
Diversification Opportunities for Japan Asia and Bumrungrad Hospital
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and Bumrungrad is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Japan Asia and Bumrungrad Hospital
Assuming the 90 days horizon Japan Asia Investment is expected to generate 0.65 times more return on investment than Bumrungrad Hospital. However, Japan Asia Investment is 1.53 times less risky than Bumrungrad Hospital. It trades about -0.04 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.15 per unit of risk. If you would invest 136.00 in Japan Asia Investment on September 12, 2024 and sell it today you would lose (6.00) from holding Japan Asia Investment or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Japan Asia Investment |
| Bumrungrad Hospital |
Japan Asia and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Bumrungrad Hospital
The main advantage of trading using opposite Japan Asia and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Universal Health Services | Bumrungrad Hospital vs. Superior Plus Corp | 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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