Correlation Between Ramkhamhaeng Hospital and Siam Wellness

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

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

Diversification Opportunities for Ramkhamhaeng Hospital and Siam Wellness

-0.44

Correlation Coefficient

Ramkhamhaeng Hospital  Siam Wellness

Very good diversification

The 3 months correlation between Ramkhamhaeng and Siam is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ramkhamhaeng Hospital Public 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 Ramkhamhaeng 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 Ramkhamhaeng Hospital Public 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 Ramkhamhaeng Hospital i.e., Ramkhamhaeng Hospital and Siam Wellness go up and down completely randomly.

Pair Corralation between Ramkhamhaeng Hospital and Siam Wellness

Assuming the 90 days trading horizon Ramkhamhaeng Hospital Public is expected to under-perform the Siam Wellness. But the stock apears to be less risky and, when comparing its historical volatility, Ramkhamhaeng Hospital Public is 1.28 times less risky than Siam Wellness. The stock trades about -0.16 of its potential returns per unit of risk. The Siam Wellness Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Siam Wellness Group on September 5, 2024 and sell it today you would earn a total of  85.00  from holding Siam Wellness Group or generate 13.08% return on investment over 90 days.

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

Ramkhamhaeng Hospital Public  vs.  Siam Wellness Group

Ramkhamhaeng Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramkhamhaeng Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Siam Wellness Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Wellness Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Siam Wellness disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ramkhamhaeng Hospital and Siam Wellness

The main advantage of trading using opposite Ramkhamhaeng Hospital and Siam Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramkhamhaeng Hospital 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 Ramkhamhaeng Hospital Public 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.