Correlation Between Bumrungrad Hospital and Berli Jucker

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

By analyzing existing cross correlation between Bumrungrad Hospital PCL and Berli Jucker Public, you can compare the effects of market volatilities on Bumrungrad Hospital and Berli Jucker 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 Berli Jucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Berli Jucker.

Diversification Opportunities for Bumrungrad Hospital and Berli Jucker

0.72

Correlation Coefficient

Bumrungrad Hospital  Berli Jucker

Poor diversification

The 3 months correlation between Bumrungrad and Berli is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital PCL and Berli Jucker Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berli Jucker Public 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 PCL are associated (or correlated) with Berli Jucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berli Jucker Public has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Berli Jucker go up and down completely randomly.

Pair Corralation between Bumrungrad Hospital and Berli Jucker

Assuming the 90 days horizon Bumrungrad Hospital PCL is expected to generate 1.12 times more return on investment than Berli Jucker. However, Bumrungrad Hospital is 1.12 times more volatile than Berli Jucker Public. It trades about -0.05 of its potential returns per unit of risk. Berli Jucker Public is currently generating about -0.09 per unit of risk. If you would invest  20,900  in Bumrungrad Hospital PCL on December 1, 2024 and sell it today you would lose (1,350) from holding Bumrungrad Hospital PCL or give up 6.46% of portfolio value over 90 days.

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

Bumrungrad Hospital PCL  vs.  Berli Jucker Public

Bumrungrad Hospital PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bumrungrad Hospital PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Bumrungrad Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Berli Jucker Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Berli Jucker Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental 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 Bumrungrad Hospital and Berli Jucker

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

The idea behind Bumrungrad Hospital PCL and Berli Jucker 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.