Correlation Between Vibhavadi Medical and Wattanapat Hospital
Can any of the company-specific risk be diversified away by investing in both Vibhavadi Medical 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 Vibhavadi Medical and Wattanapat Hospital 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 Wattanapat Hospital Trang, you can compare the effects of market volatilities on Vibhavadi Medical 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 Vibhavadi Medical with a short position of Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vibhavadi Medical and Wattanapat Hospital.
Diversification Opportunities for Vibhavadi Medical and Wattanapat Hospital
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vibhavadi and Wattanapat is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center 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 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 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 Vibhavadi Medical i.e., Vibhavadi Medical and Wattanapat Hospital go up and down completely randomly.
Pair Corralation between Vibhavadi Medical and Wattanapat Hospital
Assuming the 90 days trading horizon Vibhavadi Medical is expected to generate 1.13 times less return on investment than Wattanapat Hospital. But when comparing it to its historical volatility, Vibhavadi Medical Center is 1.0 times less risky than Wattanapat Hospital. It trades about 0.04 of its potential returns per unit of risk. Wattanapat Hospital Trang is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 416.00 in Wattanapat Hospital Trang on November 7, 2024 and sell it today you would earn a total of 404.00 from holding Wattanapat Hospital Trang or generate 97.12% 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. Wattanapat Hospital Trang
Performance |
| Timeline |
| Vibhavadi Medical Center |
| Wattanapat Hospital Trang |
Vibhavadi Medical and Wattanapat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vibhavadi Medical and Wattanapat Hospital
The main advantage of trading using opposite Vibhavadi Medical and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vibhavadi Medical 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.| Vibhavadi Medical vs. Chularat Hospital Public | Vibhavadi Medical vs. Bangkok Chain Hospital | Vibhavadi Medical vs. Bangkok Dusit Medical | Vibhavadi Medical vs. Bumrungrad Hospital PCL |
| Wattanapat Hospital vs. Bumrungrad Hospital PCL | Wattanapat Hospital vs. Ramkhamhaeng Hospital Public | Wattanapat Hospital vs. Thonburi Healthcare Grp | Wattanapat Hospital vs. Bangkok Chain Hospital |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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