Correlation Between Aikchol Hospital and Wattana Karnpaet

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

By analyzing existing cross correlation between Aikchol Hospital Public and Wattana Karnpaet Public, you can compare the effects of market volatilities on Aikchol Hospital and Wattana Karnpaet 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 Aikchol Hospital with a short position of Wattana Karnpaet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aikchol Hospital and Wattana Karnpaet.

Diversification Opportunities for Aikchol Hospital and Wattana Karnpaet

0.0

Correlation Coefficient

Aikchol Hospital  Wattana Karnpaet

Pay attention - limited upside

The 3 months correlation between Aikchol and Wattana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aikchol Hospital Public and Wattana Karnpaet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattana Karnpaet Public and Aikchol 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 Aikchol Hospital Public are associated (or correlated) with Wattana Karnpaet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattana Karnpaet Public has no effect on the direction of Aikchol Hospital i.e., Aikchol Hospital and Wattana Karnpaet go up and down completely randomly.

Pair Corralation between Aikchol Hospital and Wattana Karnpaet

Assuming the 90 days trading horizon Aikchol Hospital is expected to generate 13.34 times less return on investment than Wattana Karnpaet. But when comparing it to its historical volatility, Aikchol Hospital Public is 5.85 times less risky than Wattana Karnpaet. It trades about 0.03 of its potential returns per unit of risk. Wattana Karnpaet Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,225  in Wattana Karnpaet Public on September 12, 2024 and sell it today you would earn a total of  775.00  from holding Wattana Karnpaet Public or generate 12.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Aikchol Hospital Public  vs.  Wattana Karnpaet Public

Aikchol Hospital Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aikchol Hospital Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Aikchol Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Wattana Karnpaet Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wattana Karnpaet Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Wattana Karnpaet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aikchol Hospital and Wattana Karnpaet

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

The idea behind Aikchol Hospital Public and Wattana Karnpaet Public 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.