Correlation Between Bumrungrad Hospital and PTT OIL

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

Diversification Opportunities for Bumrungrad Hospital and PTT OIL

0.75

Correlation Coefficient

Bumrungrad Hospital  PTT OIL

Poor diversification

The 3 months correlation between Bumrungrad and PTT is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and PTT OIL RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL RETAIL 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 PTT OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL RETAIL has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and PTT OIL go up and down completely randomly.

Pair Corralation between Bumrungrad Hospital and PTT OIL

Assuming the 90 days horizon Bumrungrad Hospital Public is expected to generate 0.4 times more return on investment than PTT OIL. However, Bumrungrad Hospital Public is 2.49 times less risky than PTT OIL. It trades about -0.37 of its potential returns per unit of risk. PTT OIL RETAIL is currently generating about -0.22 per unit of risk. If you would invest  26,900  in Bumrungrad Hospital Public on September 5, 2024 and sell it today you would lose (5,700) from holding Bumrungrad Hospital Public or give up 21.19% of portfolio value over 90 days.

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

Bumrungrad Hospital Public  vs.  PTT OIL RETAIL

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PTT OIL RETAIL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT OIL RETAIL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 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 PTT OIL

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

The idea behind Bumrungrad Hospital Public and PTT OIL RETAIL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.