Correlation Between Shin Ruenn and Pacific Hospital

Can any of the company-specific risk be diversified away by investing in both Shin Ruenn and Pacific 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 Shin Ruenn and Pacific Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shin Ruenn Development and Pacific Hospital Supply, you can compare the effects of market volatilities on Shin Ruenn and Pacific 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 Shin Ruenn with a short position of Pacific Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Ruenn and Pacific Hospital.

Diversification Opportunities for Shin Ruenn and Pacific Hospital

-0.04

Correlation Coefficient

Shin Ruenn  Pacific Hospital

Good diversification

The 3 months correlation between Shin and Pacific is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and Pacific Hospital Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Hospital Supply and Shin Ruenn 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 Shin Ruenn Development are associated (or correlated) with Pacific Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Hospital Supply has no effect on the direction of Shin Ruenn i.e., Shin Ruenn and Pacific Hospital go up and down completely randomly.

Pair Corralation between Shin Ruenn and Pacific Hospital

Assuming the 90 days trading horizon Shin Ruenn is expected to generate 1.19 times less return on investment than Pacific Hospital. In addition to that, Shin Ruenn is 4.13 times more volatile than Pacific Hospital Supply. It trades about 0.02 of its total potential returns per unit of risk. Pacific Hospital Supply is currently generating about 0.09 per unit of volatility. If you would invest  8,223  in Pacific Hospital Supply on October 9, 2024 and sell it today you would earn a total of  1,287  from holding Pacific Hospital Supply or generate 15.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shin Ruenn Development  vs.  Pacific Hospital Supply

Shin Ruenn Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Ruenn Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shin Ruenn is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pacific Hospital Supply

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Hospital Supply are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Pacific Hospital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Shin Ruenn and Pacific Hospital

The main advantage of trading using opposite Shin Ruenn and Pacific Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn position performs unexpectedly, Pacific 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 Pacific Hospital will offset losses from the drop in Pacific Hospital's long position.

The idea behind Shin Ruenn Development and Pacific Hospital Supply pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.