Correlation Between DTC Industries and Ramkhamhaeng Hospital

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

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

Diversification Opportunities for DTC Industries and Ramkhamhaeng Hospital

0.03

Correlation Coefficient

DTC Industries  Ramkhamhaeng Hospital

Significant diversification

The 3 months correlation between DTC and Ramkhamhaeng is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding DTC Industries Public and Ramkhamhaeng Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramkhamhaeng Hospital and DTC Industries 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 DTC Industries Public are associated (or correlated) with Ramkhamhaeng Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramkhamhaeng Hospital has no effect on the direction of DTC Industries i.e., DTC Industries and Ramkhamhaeng Hospital go up and down completely randomly.

Pair Corralation between DTC Industries and Ramkhamhaeng Hospital

Assuming the 90 days trading horizon DTC Industries Public is expected to generate 11.61 times more return on investment than Ramkhamhaeng Hospital. However, DTC Industries is 11.61 times more volatile than Ramkhamhaeng Hospital Public. It trades about 0.12 of its potential returns per unit of risk. Ramkhamhaeng Hospital Public is currently generating about -0.18 per unit of risk. If you would invest  3,225  in DTC Industries Public on October 10, 2024 and sell it today you would earn a total of  525.00  from holding DTC Industries Public or generate 16.28% return on investment over 90 days.

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

DTC Industries Public  vs.  Ramkhamhaeng Hospital Public

DTC Industries Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DTC Industries Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, DTC Industries disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ramkhamhaeng Hospital

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ramkhamhaeng Hospital Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, Ramkhamhaeng Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with DTC Industries and Ramkhamhaeng Hospital

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

The idea behind DTC Industries Public and Ramkhamhaeng 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..