Correlation Between Gelsenwasser and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Gelsenwasser and Bumrungrad 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 Gelsenwasser and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gelsenwasser AG and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Gelsenwasser and Bumrungrad 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 Gelsenwasser with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gelsenwasser and Bumrungrad Hospital.
Diversification Opportunities for Gelsenwasser and Bumrungrad Hospital
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gelsenwasser and Bumrungrad is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gelsenwasser AG and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Gelsenwasser 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 Gelsenwasser AG are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of Gelsenwasser i.e., Gelsenwasser and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Gelsenwasser and Bumrungrad Hospital
Assuming the 90 days horizon Gelsenwasser AG is expected to under-perform the Bumrungrad Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Gelsenwasser AG is 2.28 times less risky than Bumrungrad Hospital. The stock trades about -0.02 of its potential returns per unit of risk. The Bumrungrad Hospital Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Bumrungrad Hospital Public on September 5, 2024 and sell it today you would earn a total of 485.00 from holding Bumrungrad Hospital Public or generate 606.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gelsenwasser AG vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Gelsenwasser AG |
| Bumrungrad Hospital |
Gelsenwasser and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gelsenwasser and Bumrungrad Hospital
The main advantage of trading using opposite Gelsenwasser and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gelsenwasser position performs unexpectedly, Bumrungrad 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| Gelsenwasser vs. HF FOODS GRP | Gelsenwasser vs. Tower One Wireless | Gelsenwasser vs. Lery Seafood Group | Gelsenwasser vs. MAVEN WIRELESS SWEDEN |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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