Correlation Between Ramkhamhaeng Hospital and Wattanapat Hospital
Can any of the company-specific risk be diversified away by investing in both Ramkhamhaeng Hospital and Wattanapat 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 Wattanapat 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 Wattanapat Hospital Trang, you can compare the effects of market volatilities on Ramkhamhaeng Hospital and Wattanapat 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 Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramkhamhaeng Hospital and Wattanapat Hospital.
Diversification Opportunities for Ramkhamhaeng Hospital and Wattanapat Hospital
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ramkhamhaeng and Wattanapat is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ramkhamhaeng Hospital Public and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang 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 Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of Ramkhamhaeng Hospital i.e., Ramkhamhaeng Hospital and Wattanapat Hospital go up and down completely randomly.
Pair Corralation between Ramkhamhaeng Hospital and Wattanapat Hospital
Assuming the 90 days trading horizon Ramkhamhaeng Hospital Public is expected to generate 0.44 times more return on investment than Wattanapat Hospital. However, Ramkhamhaeng Hospital Public is 2.29 times less risky than Wattanapat Hospital. It trades about -0.16 of its potential returns per unit of risk. Wattanapat Hospital Trang is currently generating about -0.29 per unit of risk. If you would invest 2,365 in Ramkhamhaeng Hospital Public on August 28, 2024 and sell it today you would lose (75.00) from holding Ramkhamhaeng Hospital Public or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramkhamhaeng Hospital Public vs. Wattanapat Hospital Trang
Performance |
| Timeline |
| Ramkhamhaeng Hospital |
| Wattanapat Hospital Trang |
Ramkhamhaeng Hospital and Wattanapat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramkhamhaeng Hospital and Wattanapat Hospital
The main advantage of trading using opposite Ramkhamhaeng Hospital and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramkhamhaeng Hospital position performs unexpectedly, Wattanapat 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 Wattanapat Hospital will offset losses from the drop in Wattanapat Hospital's long position.The idea behind Ramkhamhaeng Hospital Public and Wattanapat Hospital Trang 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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