Correlation Between Mega Lifesciences and Chularat Hospital
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences 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 Mega Lifesciences and Chularat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Chularat Hospital Public, you can compare the effects of market volatilities on Mega Lifesciences 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 Mega Lifesciences with a short position of Chularat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Chularat Hospital.
Diversification Opportunities for Mega Lifesciences and Chularat Hospital
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mega and Chularat is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences i.e., Mega Lifesciences and Chularat Hospital go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Chularat Hospital
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Chularat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 1.23 times less risky than Chularat Hospital. The stock trades about -0.06 of its potential returns per unit of risk. The Chularat Hospital Public is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Chularat Hospital Public on August 25, 2024 and sell it today you would lose (32.00) from holding Chularat Hospital Public or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Chularat Hospital Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Chularat Hospital Public |
Mega Lifesciences and Chularat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Chularat Hospital
The main advantage of trading using opposite Mega Lifesciences and Chularat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences 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.| Mega Lifesciences vs. Chularat Hospital Public | Mega Lifesciences vs. Ekachai Medical Care | Mega Lifesciences vs. Bangkok Chain Hospital | Mega Lifesciences vs. Srivichaivejvivat Public |
| Chularat Hospital vs. Bangkok Chain Hospital | Chularat Hospital vs. Bangkok Dusit Medical | Chularat Hospital vs. Bumrungrad Hospital Public | Chularat Hospital vs. AP 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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