Correlation Between Bangkok Chain and Vibhavadi Medical

Can any of the company-specific risk be diversified away by investing in both Bangkok Chain 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 Bangkok Chain and Vibhavadi Medical 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 Vibhavadi Medical Center, you can compare the effects of market volatilities on Bangkok Chain 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 Bangkok Chain with a short position of Vibhavadi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and Vibhavadi Medical.

Diversification Opportunities for Bangkok Chain and Vibhavadi Medical

0.05

Correlation Coefficient

Bangkok Chain  Vibhavadi Medical

Significant diversification

The 3 months correlation between Bangkok and Vibhavadi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital 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 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 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 Bangkok Chain i.e., Bangkok Chain and Vibhavadi Medical go up and down completely randomly.

Pair Corralation between Bangkok Chain and Vibhavadi Medical

Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to generate 1.04 times more return on investment than Vibhavadi Medical. However, Bangkok Chain is 1.04 times more volatile than Vibhavadi Medical Center. It trades about 0.03 of its potential returns per unit of risk. Vibhavadi Medical Center is currently generating about -0.05 per unit of risk. If you would invest  1,670  in Bangkok Chain Hospital on September 5, 2024 and sell it today you would earn a total of  40.00  from holding Bangkok Chain Hospital or generate 2.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Bangkok Chain Hospital  vs.  Vibhavadi Medical Center

Bangkok Chain Hospital

Risk-Adjusted Performance

2 of 100

Weak

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

Vibhavadi Medical Center

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vibhavadi Medical Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Vibhavadi Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bangkok Chain and Vibhavadi Medical

The main advantage of trading using opposite Bangkok Chain and Vibhavadi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain 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.

The idea behind Bangkok Chain Hospital and Vibhavadi Medical Center 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.