Correlation Between Humanica Public and Chularat Hospital

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

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

Diversification Opportunities for Humanica Public and Chularat Hospital

0.26

Correlation Coefficient

Humanica Public  Chularat Hospital

Modest diversification

The 3 months correlation between Humanica and Chularat is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Humanica Public 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 Humanica Public 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 Humanica Public 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 Humanica Public i.e., Humanica Public and Chularat Hospital go up and down completely randomly.

Pair Corralation between Humanica Public and Chularat Hospital

Assuming the 90 days trading horizon Humanica Public is expected to under-perform the Chularat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Humanica Public is 1.17 times less risky than Chularat Hospital. The stock trades about -0.19 of its potential returns per unit of risk. The Chularat Hospital Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  266.00  in Chularat Hospital Public on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Chularat Hospital Public or generate 0.75% return on investment over 90 days.

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

Humanica Public  vs.  Chularat Hospital Public

Humanica Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humanica Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Chularat Hospital Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chularat Hospital Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Chularat 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 Humanica Public and Chularat Hospital

The main advantage of trading using opposite Humanica Public and Chularat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humanica Public 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 Humanica Public 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.