Correlation Between Ramkhamhaeng Hospital and Aikchol Hospital
Can any of the company-specific risk be diversified away by investing in both Ramkhamhaeng Hospital and Aikchol 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 Ramkhamhaeng Hospital and Aikchol Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramkhamhaeng Hospital Public and Aikchol Hospital Public, you can compare the effects of market volatilities on Ramkhamhaeng Hospital and Aikchol 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 Ramkhamhaeng Hospital with a short position of Aikchol Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramkhamhaeng Hospital and Aikchol Hospital.
Diversification Opportunities for Ramkhamhaeng Hospital and Aikchol Hospital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramkhamhaeng and Aikchol is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ramkhamhaeng Hospital Public and Aikchol Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aikchol Hospital Public and Ramkhamhaeng 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 Ramkhamhaeng Hospital Public are associated (or correlated) with Aikchol Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aikchol Hospital Public has no effect on the direction of Ramkhamhaeng Hospital i.e., Ramkhamhaeng Hospital and Aikchol Hospital go up and down completely randomly.
Pair Corralation between Ramkhamhaeng Hospital and Aikchol Hospital
Assuming the 90 days trading horizon Ramkhamhaeng Hospital Public is expected to under-perform the Aikchol Hospital. In addition to that, Ramkhamhaeng Hospital is 1.46 times more volatile than Aikchol Hospital Public. It trades about -0.09 of its total potential returns per unit of risk. Aikchol Hospital Public is currently generating about 0.05 per unit of volatility. If you would invest 1,570 in Aikchol Hospital Public on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Aikchol Hospital Public or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramkhamhaeng Hospital Public vs. Aikchol Hospital Public
Performance |
| Timeline |
| Ramkhamhaeng Hospital |
| Aikchol Hospital Public |
Ramkhamhaeng Hospital and Aikchol Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramkhamhaeng Hospital and Aikchol Hospital
The main advantage of trading using opposite Ramkhamhaeng Hospital and Aikchol Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramkhamhaeng Hospital position performs unexpectedly, Aikchol 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 Aikchol Hospital will offset losses from the drop in Aikchol Hospital's long position.The idea behind Ramkhamhaeng Hospital Public and Aikchol Hospital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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