Correlation Between Principal Capital and Ramkhamhaeng Hospital
Can any of the company-specific risk be diversified away by investing in both Principal Capital and Ramkhamhaeng 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 Principal Capital and Ramkhamhaeng Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Capital Public and Ramkhamhaeng Hospital Public, you can compare the effects of market volatilities on Principal Capital and Ramkhamhaeng 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 Principal Capital with a short position of Ramkhamhaeng Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Capital and Ramkhamhaeng Hospital.
Diversification Opportunities for Principal Capital and Ramkhamhaeng Hospital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Principal and Ramkhamhaeng is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Principal Capital Public and Ramkhamhaeng Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramkhamhaeng Hospital and Principal Capital 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 Principal Capital Public are associated (or correlated) with Ramkhamhaeng Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramkhamhaeng Hospital has no effect on the direction of Principal Capital i.e., Principal Capital and Ramkhamhaeng Hospital go up and down completely randomly.
Pair Corralation between Principal Capital and Ramkhamhaeng Hospital
Assuming the 90 days trading horizon Principal Capital Public is expected to under-perform the Ramkhamhaeng Hospital. In addition to that, Principal Capital is 2.66 times more volatile than Ramkhamhaeng Hospital Public. It trades about -0.02 of its total potential returns per unit of risk. Ramkhamhaeng Hospital Public is currently generating about -0.03 per unit of volatility. If you would invest 2,345 in Ramkhamhaeng Hospital Public on August 31, 2024 and sell it today you would lose (15.00) from holding Ramkhamhaeng Hospital Public or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Principal Capital Public vs. Ramkhamhaeng Hospital Public
Performance |
| Timeline |
| Principal Capital Public |
| Ramkhamhaeng Hospital |
Principal Capital and Ramkhamhaeng Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Principal Capital and Ramkhamhaeng Hospital
The main advantage of trading using opposite Principal Capital and Ramkhamhaeng Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Capital position performs unexpectedly, Ramkhamhaeng 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 Ramkhamhaeng Hospital will offset losses from the drop in Ramkhamhaeng Hospital's long position.| Principal Capital vs. AP Public | Principal Capital vs. Bumrungrad Hospital Public | Principal Capital vs. Advanced Information Technology | Principal Capital vs. AJ Plast Public |
| Ramkhamhaeng Hospital vs. AP Public | Ramkhamhaeng Hospital vs. Bumrungrad Hospital Public | Ramkhamhaeng Hospital vs. Advanced Information Technology | Ramkhamhaeng Hospital vs. AJ Plast 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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