Correlation Between Chularat Hospital and Tong Hua

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

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

Diversification Opportunities for Chularat Hospital and Tong Hua

0.88

Correlation Coefficient

Chularat Hospital  Tong Hua

Very poor diversification

The 3 months correlation between Chularat and Tong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chularat Hospital Public and Tong Hua Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hua Holding and Chularat 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 Chularat Hospital Public are associated (or correlated) with Tong Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hua Holding has no effect on the direction of Chularat Hospital i.e., Chularat Hospital and Tong Hua go up and down completely randomly.

Pair Corralation between Chularat Hospital and Tong Hua

Assuming the 90 days trading horizon Chularat Hospital Public is expected to under-perform the Tong Hua. But the stock apears to be less risky and, when comparing its historical volatility, Chularat Hospital Public is 1.47 times less risky than Tong Hua. The stock trades about -0.1 of its potential returns per unit of risk. The Tong Hua Holding is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Tong Hua Holding on November 29, 2024 and sell it today you would lose (10.00) from holding Tong Hua Holding or give up 13.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Chularat Hospital Public  vs.  Tong Hua Holding

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

Tong Hua Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tong Hua Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers 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 Chularat Hospital and Tong Hua

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

The idea behind Chularat Hospital Public and Tong Hua Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.