Correlation Between Bumrungrad Hospital and Advanced Information

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

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

Diversification Opportunities for Bumrungrad Hospital and Advanced Information

-0.06

Correlation Coefficient

Bumrungrad Hospital  Advanced Information

Good diversification

The 3 months correlation between Bumrungrad and Advanced is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Advanced Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Information and Bumrungrad 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 Bumrungrad Hospital Public are associated (or correlated) with Advanced Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Information has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Advanced Information go up and down completely randomly.

Pair Corralation between Bumrungrad Hospital and Advanced Information

Assuming the 90 days horizon Bumrungrad Hospital Public is expected to under-perform the Advanced Information. In addition to that, Bumrungrad Hospital is 1.37 times more volatile than Advanced Information Technology. It trades about -0.44 of its total potential returns per unit of risk. Advanced Information Technology is currently generating about 0.04 per unit of volatility. If you would invest  426.00  in Advanced Information Technology on September 1, 2024 and sell it today you would earn a total of  6.00  from holding Advanced Information Technology or generate 1.41% return on investment over 90 days.

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

Bumrungrad Hospital Public  vs.  Advanced Information Technolog

Bumrungrad Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bumrungrad Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Advanced Information

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Information Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Advanced Information disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bumrungrad Hospital and Advanced Information

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

The idea behind Bumrungrad Hospital Public and Advanced Information Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.