Correlation Between Richter Gedeon and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Richter Gedeon and Bumrungrad 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 Richter Gedeon and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richter Gedeon Vegyszeti and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Richter Gedeon and Bumrungrad 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 Richter Gedeon with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richter Gedeon and Bumrungrad Hospital.
Diversification Opportunities for Richter Gedeon and Bumrungrad Hospital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Richter and Bumrungrad is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Richter Gedeon Vegyszeti and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Richter Gedeon 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 Richter Gedeon Vegyszeti are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of Richter Gedeon i.e., Richter Gedeon and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Richter Gedeon and Bumrungrad Hospital
Assuming the 90 days trading horizon Richter Gedeon Vegyszeti is expected to generate 0.54 times more return on investment than Bumrungrad Hospital. However, Richter Gedeon Vegyszeti is 1.86 times less risky than Bumrungrad Hospital. It trades about -0.14 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.36 per unit of risk. If you would invest 2,742 in Richter Gedeon Vegyszeti on August 25, 2024 and sell it today you would lose (150.00) from holding Richter Gedeon Vegyszeti or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Richter Gedeon Vegyszeti vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Richter Gedeon Vegyszeti |
| Bumrungrad Hospital |
Richter Gedeon and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richter Gedeon and Bumrungrad Hospital
The main advantage of trading using opposite Richter Gedeon and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richter Gedeon position performs unexpectedly, Bumrungrad 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| Richter Gedeon vs. Shionogi Co | Richter Gedeon vs. Ipsen SA | Richter Gedeon vs. Dr Reddys Laboratories | Richter Gedeon vs. Superior Plus Corp |
| Bumrungrad Hospital vs. Ramsay Health Care | Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Select Medical Holdings | Bumrungrad Hospital vs. Medicover AB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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