Correlation Between Praram 9 and Ekachai Medical

Can any of the company-specific risk be diversified away by investing in both Praram 9 and Ekachai Medical 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 Praram 9 and Ekachai Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Praram 9 Hospital and Ekachai Medical Care, you can compare the effects of market volatilities on Praram 9 and Ekachai Medical 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 Praram 9 with a short position of Ekachai Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praram 9 and Ekachai Medical.

Diversification Opportunities for Praram 9 and Ekachai Medical

-0.68

Correlation Coefficient

Praram 9  Ekachai Medical

Excellent diversification

The 3 months correlation between Praram and Ekachai is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Praram 9 Hospital and Ekachai Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekachai Medical Care and Praram 9 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 Praram 9 Hospital are associated (or correlated) with Ekachai Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekachai Medical Care has no effect on the direction of Praram 9 i.e., Praram 9 and Ekachai Medical go up and down completely randomly.

Pair Corralation between Praram 9 and Ekachai Medical

Assuming the 90 days trading horizon Praram 9 Hospital is expected to generate 2.07 times more return on investment than Ekachai Medical. However, Praram 9 is 2.07 times more volatile than Ekachai Medical Care. It trades about 0.2 of its potential returns per unit of risk. Ekachai Medical Care is currently generating about -0.07 per unit of risk. If you would invest  2,038  in Praram 9 Hospital on September 13, 2024 and sell it today you would earn a total of  487.00  from holding Praram 9 Hospital or generate 23.9% return on investment over 90 days.

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

Praram 9 Hospital  vs.  Ekachai Medical Care

Praram 9 Hospital

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Praram 9 Hospital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Praram 9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 quite persistent technical indicators, Ekachai Medical 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 Praram 9 and Ekachai Medical

The main advantage of trading using opposite Praram 9 and Ekachai Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praram 9 position performs unexpectedly, Ekachai Medical 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 Ekachai Medical will offset losses from the drop in Ekachai Medical's long position.

The idea behind Praram 9 Hospital and Ekachai Medical Care 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.