Correlation Between Mahachai Hospital and Thonburi Healthcare

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

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

Diversification Opportunities for Mahachai Hospital and Thonburi Healthcare

0.91

Correlation Coefficient

Mahachai Hospital  Thonburi Healthcare

Almost no diversification

The 3 months correlation between Mahachai and Thonburi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mahachai Hospital Public and Thonburi Healthcare Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thonburi Healthcare Grp and Mahachai 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 Mahachai Hospital Public are associated (or correlated) with Thonburi Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thonburi Healthcare Grp has no effect on the direction of Mahachai Hospital i.e., Mahachai Hospital and Thonburi Healthcare go up and down completely randomly.

Pair Corralation between Mahachai Hospital and Thonburi Healthcare

Assuming the 90 days trading horizon Mahachai Hospital Public is expected to generate 0.6 times more return on investment than Thonburi Healthcare. However, Mahachai Hospital Public is 1.66 times less risky than Thonburi Healthcare. It trades about -0.37 of its potential returns per unit of risk. Thonburi Healthcare Grp is currently generating about -0.52 per unit of risk. If you would invest  2,750  in Mahachai Hospital Public on October 22, 2024 and sell it today you would lose (250.00) from holding Mahachai Hospital Public or give up 9.09% of portfolio value over 90 days.

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

Mahachai Hospital Public  vs.  Thonburi Healthcare Grp

Mahachai Hospital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mahachai Hospital 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 indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Thonburi Healthcare Grp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thonburi Healthcare Grp 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mahachai Hospital and Thonburi Healthcare

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

The idea behind Mahachai Hospital Public and Thonburi Healthcare Grp 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.