Correlation Between Rajthanee Hospital and Vibhavadi Medical
Can any of the company-specific risk be diversified away by investing in both Rajthanee Hospital and Vibhavadi Medical 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 Rajthanee Hospital and Vibhavadi Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rajthanee Hospital Public and Vibhavadi Medical Center, you can compare the effects of market volatilities on Rajthanee Hospital and Vibhavadi Medical 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 Rajthanee Hospital with a short position of Vibhavadi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rajthanee Hospital and Vibhavadi Medical.
Diversification Opportunities for Rajthanee Hospital and Vibhavadi Medical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rajthanee and Vibhavadi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Rajthanee Hospital Public and Vibhavadi Medical Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vibhavadi Medical Center and Rajthanee 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 Rajthanee Hospital Public are associated (or correlated) with Vibhavadi Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vibhavadi Medical Center has no effect on the direction of Rajthanee Hospital i.e., Rajthanee Hospital and Vibhavadi Medical go up and down completely randomly.
Pair Corralation between Rajthanee Hospital and Vibhavadi Medical
Assuming the 90 days trading horizon Rajthanee Hospital Public is expected to under-perform the Vibhavadi Medical. In addition to that, Rajthanee Hospital is 1.5 times more volatile than Vibhavadi Medical Center. It trades about -0.03 of its total potential returns per unit of risk. Vibhavadi Medical Center is currently generating about 0.15 per unit of volatility. If you would invest 191.00 in Vibhavadi Medical Center on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Vibhavadi Medical Center or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rajthanee Hospital Public vs. Vibhavadi Medical Center
Performance |
| Timeline |
| Rajthanee Hospital Public |
| Vibhavadi Medical Center |
Rajthanee Hospital and Vibhavadi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rajthanee Hospital and Vibhavadi Medical
The main advantage of trading using opposite Rajthanee Hospital and Vibhavadi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rajthanee Hospital position performs unexpectedly, Vibhavadi Medical 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 Vibhavadi Medical will offset losses from the drop in Vibhavadi Medical's long position.| Rajthanee Hospital vs. AP Public | Rajthanee Hospital vs. Bumrungrad Hospital Public | Rajthanee Hospital vs. Advanced Information Technology | Rajthanee Hospital vs. AJ Plast Public |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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