Correlation Between Nonthavej Hospital and Dental Public

Can any of the company-specific risk be diversified away by investing in both Nonthavej Hospital and Dental Public 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 Dental Public 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 Dental Public, you can compare the effects of market volatilities on Nonthavej Hospital and Dental Public 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 Dental Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nonthavej Hospital and Dental Public.

Diversification Opportunities for Nonthavej Hospital and Dental Public

0.79

Correlation Coefficient

Nonthavej Hospital  Dental Public

Poor diversification

The 3 months correlation between Nonthavej and Dental is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nonthavej Hospital Public and Dental Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dental 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 Dental Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dental Public has no effect on the direction of Nonthavej Hospital i.e., Nonthavej Hospital and Dental Public go up and down completely randomly.

Pair Corralation between Nonthavej Hospital and Dental Public

Assuming the 90 days trading horizon Nonthavej Hospital Public is expected to generate 0.69 times more return on investment than Dental Public. However, Nonthavej Hospital Public is 1.46 times less risky than Dental Public. It trades about -0.05 of its potential returns per unit of risk. Dental Public is currently generating about -0.26 per unit of risk. If you would invest  2,911  in Nonthavej Hospital Public on December 30, 2024 and sell it today you would lose (111.00) from holding Nonthavej Hospital Public or give up 3.81% of portfolio value over 90 days.

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

Nonthavej Hospital Public  vs.  Dental 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 quite persistent basic indicators, Nonthavej Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Dental Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dental 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nonthavej Hospital and Dental Public

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

The idea behind Nonthavej Hospital Public and Dental 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.