Correlation Between Vibhavadi Medical and Thai Nakarin
Can any of the company-specific risk be diversified away by investing in both Vibhavadi Medical and Thai Nakarin 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 Vibhavadi Medical and Thai Nakarin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vibhavadi Medical Center and Thai Nakarin Hospital, you can compare the effects of market volatilities on Vibhavadi Medical and Thai Nakarin 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 Vibhavadi Medical with a short position of Thai Nakarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vibhavadi Medical and Thai Nakarin.
Diversification Opportunities for Vibhavadi Medical and Thai Nakarin
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vibhavadi and Thai is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center and Thai Nakarin Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nakarin Hospital and Vibhavadi Medical 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 Vibhavadi Medical Center are associated (or correlated) with Thai Nakarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nakarin Hospital has no effect on the direction of Vibhavadi Medical i.e., Vibhavadi Medical and Thai Nakarin go up and down completely randomly.
Pair Corralation between Vibhavadi Medical and Thai Nakarin
Assuming the 90 days trading horizon Vibhavadi Medical Center is expected to under-perform the Thai Nakarin. In addition to that, Vibhavadi Medical is 2.96 times more volatile than Thai Nakarin Hospital. It trades about -0.04 of its total potential returns per unit of risk. Thai Nakarin Hospital is currently generating about 0.18 per unit of volatility. If you would invest 3,519 in Thai Nakarin Hospital on September 12, 2024 and sell it today you would earn a total of 231.00 from holding Thai Nakarin Hospital or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vibhavadi Medical Center vs. Thai Nakarin Hospital
Performance |
| Timeline |
| Vibhavadi Medical Center |
| Thai Nakarin Hospital |
Vibhavadi Medical and Thai Nakarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vibhavadi Medical and Thai Nakarin
The main advantage of trading using opposite Vibhavadi Medical and Thai Nakarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vibhavadi Medical position performs unexpectedly, Thai Nakarin 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 Thai Nakarin will offset losses from the drop in Thai Nakarin's long position.| Vibhavadi Medical vs. Chularat Hospital Public | Vibhavadi Medical vs. Bangkok Chain Hospital | Vibhavadi Medical vs. Bangkok Dusit Medical | Vibhavadi Medical vs. Bumrungrad Hospital 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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