Correlation Between Ekachai Medical and Chularat Hospital

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

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

Diversification Opportunities for Ekachai Medical and Chularat Hospital

0.34

Correlation Coefficient

Ekachai Medical  Chularat Hospital

Weak diversification

The 3 months correlation between Ekachai and Chularat is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ekachai Medical Care and Chularat Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chularat Hospital Public and Ekachai Medical 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 Ekachai Medical Care are associated (or correlated) with Chularat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chularat Hospital Public has no effect on the direction of Ekachai Medical i.e., Ekachai Medical and Chularat Hospital go up and down completely randomly.

Pair Corralation between Ekachai Medical and Chularat Hospital

Assuming the 90 days trading horizon Ekachai Medical Care is expected to under-perform the Chularat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Ekachai Medical Care is 1.26 times less risky than Chularat Hospital. The stock trades about -0.38 of its potential returns per unit of risk. The Chularat Hospital Public is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest  268.00  in Chularat Hospital Public on September 23, 2024 and sell it today you would lose (20.00) from holding Chularat Hospital Public or give up 7.46% of portfolio value over 90 days.

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

Ekachai Medical Care  vs.  Chularat Hospital Public

Ekachai Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekachai Medical Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Chularat Hospital Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chularat Hospital Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Chularat Hospital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ekachai Medical and Chularat Hospital

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

The idea behind Ekachai Medical Care and Chularat 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.