Correlation Between Nonthavej Hospital and Aikchol Hospital

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

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

Diversification Opportunities for Nonthavej Hospital and Aikchol Hospital

0.59

Correlation Coefficient

Nonthavej Hospital  Aikchol Hospital

Very weak diversification

The 3 months correlation between Nonthavej and Aikchol is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nonthavej Hospital Public and Aikchol Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aikchol Hospital Public and Nonthavej 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 Nonthavej Hospital Public are associated (or correlated) with Aikchol Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aikchol Hospital Public has no effect on the direction of Nonthavej Hospital i.e., Nonthavej Hospital and Aikchol Hospital go up and down completely randomly.

Pair Corralation between Nonthavej Hospital and Aikchol Hospital

Assuming the 90 days trading horizon Nonthavej Hospital Public is expected to generate 0.35 times more return on investment than Aikchol Hospital. However, Nonthavej Hospital Public is 2.87 times less risky than Aikchol Hospital. It trades about -0.09 of its potential returns per unit of risk. Aikchol Hospital Public is currently generating about -0.03 per unit of risk. If you would invest  3,125  in Nonthavej Hospital Public on December 2, 2024 and sell it today you would lose (200.00) from holding Nonthavej Hospital Public or give up 6.4% of portfolio value over 90 days.

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

Nonthavej Hospital Public  vs.  Aikchol Hospital Public

Nonthavej Hospital Public

Risk-Adjusted Performance

Very Weak

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

Aikchol Hospital Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nonthavej Hospital and Aikchol Hospital

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

The idea behind Nonthavej Hospital Public and Aikchol 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.