Correlation Between Mahachai Hospital and Chularat Hospital
Can any of the company-specific risk be diversified away by investing in both Mahachai Hospital and Chularat 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 Mahachai Hospital and Chularat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahachai Hospital Public and Chularat Hospital Public, you can compare the effects of market volatilities on Mahachai Hospital and Chularat 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 Mahachai Hospital with a short position of Chularat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahachai Hospital and Chularat Hospital.
Diversification Opportunities for Mahachai Hospital and Chularat Hospital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mahachai and Chularat is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mahachai Hospital Public and Chularat Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chularat Hospital Public and Mahachai Hospital 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 Mahachai Hospital Public are associated (or correlated) with Chularat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chularat Hospital Public has no effect on the direction of Mahachai Hospital i.e., Mahachai Hospital and Chularat Hospital go up and down completely randomly.
Pair Corralation between Mahachai Hospital and Chularat Hospital
Assuming the 90 days trading horizon Mahachai Hospital is expected to generate 1.95 times less return on investment than Chularat Hospital. But when comparing it to its historical volatility, Mahachai Hospital Public is 1.41 times less risky than Chularat Hospital. It trades about 0.04 of its potential returns per unit of risk. Chularat Hospital Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 367.00 in Chularat Hospital Public on August 26, 2024 and sell it today you would lose (107.00) from holding Chularat Hospital Public or give up 29.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahachai Hospital Public vs. Chularat Hospital Public
Performance |
| Timeline |
| Mahachai Hospital Public |
| Chularat Hospital Public |
Mahachai Hospital and Chularat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahachai Hospital and Chularat Hospital
The main advantage of trading using opposite Mahachai Hospital and Chularat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahachai Hospital position performs unexpectedly, Chularat 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 Chularat Hospital will offset losses from the drop in Chularat Hospital's long position.| Mahachai Hospital vs. Ekachai Medical Care | Mahachai Hospital vs. Bangkok Chain Hospital | Mahachai Hospital vs. Srivichaivejvivat 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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