Correlation Between Ratchaphruek Hospital and Bangkok Chain
Can any of the company-specific risk be diversified away by investing in both Ratchaphruek Hospital and Bangkok Chain 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 Ratchaphruek Hospital and Bangkok Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratchaphruek Hospital Public and Bangkok Chain Hospital, you can compare the effects of market volatilities on Ratchaphruek Hospital and Bangkok Chain 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 Ratchaphruek Hospital with a short position of Bangkok Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratchaphruek Hospital and Bangkok Chain.
Diversification Opportunities for Ratchaphruek Hospital and Bangkok Chain
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ratchaphruek and Bangkok is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ratchaphruek Hospital Public and Bangkok Chain Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Chain Hospital and Ratchaphruek 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 Ratchaphruek Hospital Public are associated (or correlated) with Bangkok Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Chain Hospital has no effect on the direction of Ratchaphruek Hospital i.e., Ratchaphruek Hospital and Bangkok Chain go up and down completely randomly.
Pair Corralation between Ratchaphruek Hospital and Bangkok Chain
Assuming the 90 days trading horizon Ratchaphruek Hospital Public is expected to generate 50.49 times more return on investment than Bangkok Chain. However, Ratchaphruek Hospital is 50.49 times more volatile than Bangkok Chain Hospital. It trades about 0.08 of its potential returns per unit of risk. Bangkok Chain Hospital is currently generating about -0.06 per unit of risk. If you would invest 584.00 in Ratchaphruek Hospital Public on August 31, 2024 and sell it today you would lose (39.00) from holding Ratchaphruek Hospital Public or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ratchaphruek Hospital Public vs. Bangkok Chain Hospital
Performance |
| Timeline |
| Ratchaphruek Hospital |
| Bangkok Chain Hospital |
Ratchaphruek Hospital and Bangkok Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ratchaphruek Hospital and Bangkok Chain
The main advantage of trading using opposite Ratchaphruek Hospital and Bangkok Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratchaphruek Hospital position performs unexpectedly, Bangkok Chain 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 Bangkok Chain will offset losses from the drop in Bangkok Chain's long position.| Ratchaphruek Hospital vs. AP Public | Ratchaphruek Hospital vs. Advanced Information Technology | Ratchaphruek Hospital vs. AJ Plast Public | Ratchaphruek Hospital vs. Berli Jucker Public |
| Bangkok Chain vs. AP Public | Bangkok Chain vs. Advanced Information Technology | Bangkok Chain vs. AJ Plast Public | Bangkok Chain vs. Berli Jucker Public |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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