Correlation Between Thonburi Medical and Platinum
Can any of the company-specific risk be diversified away by investing in both Thonburi Medical and Platinum 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 Platinum 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 The Platinum Group, you can compare the effects of market volatilities on Thonburi Medical and Platinum 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 Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thonburi Medical and Platinum.
Diversification Opportunities for Thonburi Medical and Platinum
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thonburi and Platinum is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Thonburi Medical Centre and The Platinum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group 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 Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group has no effect on the direction of Thonburi Medical i.e., Thonburi Medical and Platinum go up and down completely randomly.
Pair Corralation between Thonburi Medical and Platinum
Assuming the 90 days trading horizon Thonburi Medical Centre is expected to generate 1.0 times more return on investment than Platinum. However, Thonburi Medical Centre is 1.0 times less risky than Platinum. It trades about 0.06 of its potential returns per unit of risk. The Platinum Group is currently generating about 0.06 per unit of risk. If you would invest 9,027 in Thonburi Medical Centre on September 14, 2024 and sell it today you would earn a total of 423.00 from holding Thonburi Medical Centre or generate 4.69% 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. The Platinum Group
Performance |
| Timeline |
| Thonburi Medical Centre |
| Platinum Group |
Thonburi Medical and Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thonburi Medical and Platinum
The main advantage of trading using opposite Thonburi Medical and Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thonburi Medical position performs unexpectedly, Platinum 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 Platinum will offset losses from the drop in Platinum's long position.| Thonburi Medical vs. Aikchol Hospital Public | Thonburi Medical vs. Nonthavej Hospital Public | Thonburi Medical vs. Wattana Karnpaet Public | Thonburi Medical vs. Mahachai Hospital Public |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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