Correlation Between Praram 9 and Siam Wellness

Can any of the company-specific risk be diversified away by investing in both Praram 9 and Siam Wellness 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 Siam Wellness 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 Siam Wellness Group, you can compare the effects of market volatilities on Praram 9 and Siam Wellness 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 Siam Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praram 9 and Siam Wellness.

Diversification Opportunities for Praram 9 and Siam Wellness

0.42

Correlation Coefficient

Praram 9  Siam Wellness

Very weak diversification

The 3 months correlation between Praram and Siam is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Praram 9 Hospital and Siam Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Wellness Group 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 Siam Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Wellness Group has no effect on the direction of Praram 9 i.e., Praram 9 and Siam Wellness go up and down completely randomly.

Pair Corralation between Praram 9 and Siam Wellness

Assuming the 90 days trading horizon Praram 9 Hospital is expected to generate 0.9 times more return on investment than Siam Wellness. However, Praram 9 Hospital is 1.11 times less risky than Siam Wellness. It trades about 0.2 of its potential returns per unit of risk. Siam Wellness Group is currently generating about 0.01 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 Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Praram 9 Hospital  vs.  Siam Wellness Group

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.

Siam Wellness Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Wellness Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Siam Wellness 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 Siam Wellness

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

The idea behind Praram 9 Hospital and Siam Wellness Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.