Correlation Between Chiang Mai and Wattanapat Hospital

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

By analyzing existing cross correlation between Chiang Mai Ram and Wattanapat Hospital Trang, you can compare the effects of market volatilities on Chiang Mai and Wattanapat 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 Chiang Mai with a short position of Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiang Mai and Wattanapat Hospital.

Diversification Opportunities for Chiang Mai and Wattanapat Hospital

0.07

Correlation Coefficient

Chiang Mai  Wattanapat Hospital

Significant diversification

The 3 months correlation between Chiang and Wattanapat is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chiang Mai Ram and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang and Chiang Mai 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 Chiang Mai Ram are associated (or correlated) with Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of Chiang Mai i.e., Chiang Mai and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between Chiang Mai and Wattanapat Hospital

Assuming the 90 days trading horizon Chiang Mai Ram is expected to under-perform the Wattanapat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Chiang Mai Ram is 1.58 times less risky than Wattanapat Hospital. The stock trades about -0.24 of its potential returns per unit of risk. The Wattanapat Hospital Trang is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  860.00  in Wattanapat Hospital Trang on December 30, 2024 and sell it today you would lose (60.00) from holding Wattanapat Hospital Trang or give up 6.98% of portfolio value over 90 days.

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

Chiang Mai Ram  vs.  Wattanapat Hospital Trang

Chiang Mai Ram

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chiang Mai Ram 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 basic 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.

Wattanapat Hospital Trang

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Chiang Mai and Wattanapat Hospital

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

The idea behind Chiang Mai Ram and Wattanapat Hospital Trang 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.