Correlation Between Thonburi Medical and Mahachai Hospital
Can any of the company-specific risk be diversified away by investing in both Thonburi Medical and Mahachai 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 Thonburi Medical and Mahachai Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thonburi Medical Centre and Mahachai Hospital Public, you can compare the effects of market volatilities on Thonburi Medical and Mahachai 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 Thonburi Medical with a short position of Mahachai Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thonburi Medical and Mahachai Hospital.
Diversification Opportunities for Thonburi Medical and Mahachai Hospital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thonburi and Mahachai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thonburi Medical Centre and Mahachai Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahachai Hospital Public and Thonburi Medical 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 Thonburi Medical Centre are associated (or correlated) with Mahachai Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahachai Hospital Public has no effect on the direction of Thonburi Medical i.e., Thonburi Medical and Mahachai Hospital go up and down completely randomly.
Pair Corralation between Thonburi Medical and Mahachai Hospital
Assuming the 90 days trading horizon Thonburi Medical Centre is expected to generate 0.87 times more return on investment than Mahachai Hospital. However, Thonburi Medical Centre is 1.15 times less risky than Mahachai Hospital. It trades about 0.2 of its potential returns per unit of risk. Mahachai Hospital Public is currently generating about -0.28 per unit of risk. If you would invest 9,000 in Thonburi Medical Centre on September 1, 2024 and sell it today you would earn a total of 575.00 from holding Thonburi Medical Centre or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thonburi Medical Centre vs. Mahachai Hospital Public
Performance |
| Timeline |
| Thonburi Medical Centre |
| Mahachai Hospital Public |
Thonburi Medical and Mahachai Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thonburi Medical and Mahachai Hospital
The main advantage of trading using opposite Thonburi Medical and Mahachai Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thonburi Medical position performs unexpectedly, Mahachai 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 Mahachai Hospital will offset losses from the drop in Mahachai Hospital's long position.| Thonburi Medical vs. AP Public | Thonburi Medical vs. Advanced Information Technology | Thonburi Medical vs. AJ Plast Public | Thonburi Medical vs. Berli Jucker Public |
| Mahachai Hospital vs. AP Public | Mahachai Hospital vs. Advanced Information Technology | Mahachai Hospital vs. AJ Plast Public | Mahachai Hospital vs. Berli Jucker Public |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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