Correlation Between Mahachai Hospital and Union Pioneer
Can any of the company-specific risk be diversified away by investing in both Mahachai Hospital and Union Pioneer 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 Union Pioneer 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 Union Pioneer Public, you can compare the effects of market volatilities on Mahachai Hospital and Union Pioneer 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 Union Pioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahachai Hospital and Union Pioneer.
Diversification Opportunities for Mahachai Hospital and Union Pioneer
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mahachai and Union is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mahachai Hospital Public and Union Pioneer Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Pioneer 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 Union Pioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Pioneer Public has no effect on the direction of Mahachai Hospital i.e., Mahachai Hospital and Union Pioneer go up and down completely randomly.
Pair Corralation between Mahachai Hospital and Union Pioneer
Assuming the 90 days trading horizon Mahachai Hospital Public is expected to under-perform the Union Pioneer. But the stock apears to be less risky and, when comparing its historical volatility, Mahachai Hospital Public is 1.38 times less risky than Union Pioneer. The stock trades about -0.31 of its potential returns per unit of risk. The Union Pioneer Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,450 in Union Pioneer Public on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Union Pioneer Public or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mahachai Hospital Public vs. Union Pioneer Public
Performance |
| Timeline |
| Mahachai Hospital Public |
| Union Pioneer Public |
Mahachai Hospital and Union Pioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahachai Hospital and Union Pioneer
The main advantage of trading using opposite Mahachai Hospital and Union Pioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahachai Hospital position performs unexpectedly, Union Pioneer 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 Union Pioneer will offset losses from the drop in Union Pioneer's long position.| Mahachai Hospital vs. AP Public | Mahachai Hospital vs. Bumrungrad Hospital Public | Mahachai Hospital vs. Advanced Information Technology | Mahachai Hospital vs. AJ Plast Public |
| Union Pioneer vs. Union Plastic Public | Union Pioneer vs. Thanulux Public | Union Pioneer vs. Univanich Palm Oil | Union Pioneer vs. Thai Poly Acrylic |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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