Correlation Between Bangkok Chain and Intermedical Care

Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and Intermedical Care 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 Bangkok Chain and Intermedical Care into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Bangkok Chain and Intermedical Care

0.65

Correlation Coefficient

Bangkok Chain  Intermedical Care

Poor diversification

The 3 months correlation between Bangkok and Intermedical is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and Intermedical Care and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedical Care and Bangkok Chain 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 Bangkok Chain Hospital are associated (or correlated) with Intermedical Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedical Care has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and Intermedical Care go up and down completely randomly.

Pair Corralation between Bangkok Chain and Intermedical Care

Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to generate 2.64 times more return on investment than Intermedical Care. However, Bangkok Chain is 2.64 times more volatile than Intermedical Care and. It trades about 0.24 of its potential returns per unit of risk. Intermedical Care and is currently generating about 0.06 per unit of risk. If you would invest  1,382  in Bangkok Chain Hospital on December 11, 2024 and sell it today you would earn a total of  148.00  from holding Bangkok Chain Hospital or generate 10.71% return on investment over 90 days.

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

Bangkok Chain Hospital  vs.  Intermedical Care and

Bangkok Chain Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Chain Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intermedical Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intermedical Care and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bangkok Chain and Intermedical Care

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

The idea behind Bangkok Chain Hospital and Intermedical Care and 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.