Correlation Between Wattanapat Hospital and Vibhavadi Medical
Can any of the company-specific risk be diversified away by investing in both Wattanapat 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 Wattanapat 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 Wattanapat Hospital Trang and Vibhavadi Medical Center, you can compare the effects of market volatilities on Wattanapat 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 Wattanapat Hospital with a short position of Vibhavadi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wattanapat Hospital and Vibhavadi Medical.
Diversification Opportunities for Wattanapat Hospital and Vibhavadi Medical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wattanapat and Vibhavadi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang 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 Wattanapat 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 Wattanapat Hospital Trang 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 Wattanapat Hospital i.e., Wattanapat Hospital and Vibhavadi Medical go up and down completely randomly.
Pair Corralation between Wattanapat Hospital and Vibhavadi Medical
Assuming the 90 days trading horizon Wattanapat Hospital is expected to generate 1.01 times less return on investment than Vibhavadi Medical. In addition to that, Wattanapat Hospital is 1.0 times more volatile than Vibhavadi Medical Center. It trades about 0.11 of its total potential returns per unit of risk. Vibhavadi Medical Center is currently generating about 0.11 per unit of volatility. If you would invest 216.00 in Vibhavadi Medical Center on August 28, 2024 and sell it today you would lose (12.00) from holding Vibhavadi Medical Center or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wattanapat Hospital Trang vs. Vibhavadi Medical Center
Performance |
| Timeline |
| Wattanapat Hospital Trang |
| Vibhavadi Medical Center |
Wattanapat Hospital and Vibhavadi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wattanapat Hospital and Vibhavadi Medical
The main advantage of trading using opposite Wattanapat Hospital and Vibhavadi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat 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.| Wattanapat Hospital vs. Vibhavadi Medical Center | Wattanapat Hospital vs. Ladprao General Hospital | Wattanapat Hospital vs. Ekachai Medical Care | Wattanapat Hospital vs. Chularat 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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