Correlation Between Berli Jucker and Bumrungrad Hospital

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

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

Diversification Opportunities for Berli Jucker and Bumrungrad Hospital

0.67

Correlation Coefficient

Berli Jucker  Bumrungrad Hospital

Poor diversification

The 3 months correlation between Berli and Bumrungrad is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Berli Jucker Public and Bumrungrad Hospital PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital PCL and Berli Jucker 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 Berli Jucker Public are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital PCL has no effect on the direction of Berli Jucker i.e., Berli Jucker and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between Berli Jucker and Bumrungrad Hospital

Assuming the 90 days trading horizon Berli Jucker Public is expected to generate 0.96 times more return on investment than Bumrungrad Hospital. However, Berli Jucker Public is 1.04 times less risky than Bumrungrad Hospital. It trades about -0.03 of its potential returns per unit of risk. Bumrungrad Hospital PCL is currently generating about -0.11 per unit of risk. If you would invest  2,330  in Berli Jucker Public on December 30, 2024 and sell it today you would lose (100.00) from holding Berli Jucker Public or give up 4.29% of portfolio value over 90 days.

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

Berli Jucker Public  vs.  Bumrungrad Hospital PCL

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 quite persistent fundamental indicators, Berli Jucker is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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 conflicting performance in the last few months, the Stock's fundamental drivers 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 Berli Jucker and Bumrungrad Hospital

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

The idea behind Berli Jucker Public and Bumrungrad Hospital PCL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.