Correlation Between Bumrungrad Hospital and Chularat Hospital

Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Chularat Hospital 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 Chularat Hospital 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 Chularat Hospital Public, you can compare the effects of market volatilities on Bumrungrad Hospital and Chularat Hospital 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 Chularat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Chularat Hospital.

Diversification Opportunities for Bumrungrad Hospital and Chularat Hospital

0.83

Correlation Coefficient

Bumrungrad Hospital  Chularat Hospital

Very poor diversification

The 3 months correlation between Bumrungrad and Chularat is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital PCL and Chularat Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chularat Hospital 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 Chularat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chularat Hospital Public has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Chularat Hospital go up and down completely randomly.

Pair Corralation between Bumrungrad Hospital and Chularat Hospital

Assuming the 90 days horizon Bumrungrad Hospital PCL is expected to generate 0.83 times more return on investment than Chularat Hospital. However, Bumrungrad Hospital PCL is 1.21 times less risky than Chularat Hospital. It trades about -0.05 of its potential returns per unit of risk. Chularat Hospital Public is currently generating about -0.14 per unit of risk. If you would invest  20,900  in Bumrungrad Hospital PCL on December 2, 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	Strong
Accuracy	100.0%
Values	Daily Returns

Bumrungrad Hospital PCL  vs.  Chularat Hospital 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.

Chularat Hospital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chularat 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bumrungrad Hospital and Chularat Hospital

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

The idea behind Bumrungrad Hospital PCL and Chularat Hospital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.