Correlation Between Ramkhamhaeng Hospital and CK Power
Can any of the company-specific risk be diversified away by investing in both Ramkhamhaeng Hospital and CK Power 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 CK Power 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 CK Power Public, you can compare the effects of market volatilities on Ramkhamhaeng Hospital and CK Power 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 CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramkhamhaeng Hospital and CK Power.
Diversification Opportunities for Ramkhamhaeng Hospital and CK Power
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramkhamhaeng and CKP-R is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ramkhamhaeng Hospital Public and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power 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 CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of Ramkhamhaeng Hospital i.e., Ramkhamhaeng Hospital and CK Power go up and down completely randomly.
Pair Corralation between Ramkhamhaeng Hospital and CK Power
Assuming the 90 days trading horizon Ramkhamhaeng Hospital Public is expected to generate 0.5 times more return on investment than CK Power. However, Ramkhamhaeng Hospital Public is 2.02 times less risky than CK Power. It trades about 0.06 of its potential returns per unit of risk. CK Power Public is currently generating about -0.06 per unit of risk. If you would invest 2,295 in Ramkhamhaeng Hospital Public on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Ramkhamhaeng Hospital Public or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramkhamhaeng Hospital Public vs. CK Power Public
Performance |
| Timeline |
| Ramkhamhaeng Hospital |
| CK Power Public |
Ramkhamhaeng Hospital and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramkhamhaeng Hospital and CK Power
The main advantage of trading using opposite Ramkhamhaeng Hospital and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramkhamhaeng Hospital position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.The idea behind Ramkhamhaeng Hospital Public and CK Power 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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