Correlation Between Ratchaphruek Hospital and Ratchthani Leasing

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

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

Diversification Opportunities for Ratchaphruek Hospital and Ratchthani Leasing

-0.3

Correlation Coefficient

Ratchaphruek Hospital  Ratchthani Leasing

Very good diversification

The 3 months correlation between Ratchaphruek and Ratchthani is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ratchaphruek Hospital Public and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing Public and Ratchaphruek 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 Ratchaphruek Hospital Public are associated (or correlated) with Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of Ratchaphruek Hospital i.e., Ratchaphruek Hospital and Ratchthani Leasing go up and down completely randomly.

Pair Corralation between Ratchaphruek Hospital and Ratchthani Leasing

Assuming the 90 days trading horizon Ratchaphruek Hospital Public is expected to under-perform the Ratchthani Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Ratchaphruek Hospital Public is 6.02 times less risky than Ratchthani Leasing. The stock trades about -0.05 of its potential returns per unit of risk. The Ratchthani Leasing Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  152.00  in Ratchthani Leasing Public on December 27, 2024 and sell it today you would earn a total of  16.00  from holding Ratchthani Leasing Public or generate 10.53% return on investment over 90 days.

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

Ratchaphruek Hospital Public  vs.  Ratchthani Leasing Public

Ratchaphruek Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ratchaphruek Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Ratchaphruek Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Ratchthani Leasing Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ratchthani Leasing Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Ratchthani Leasing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ratchaphruek Hospital and Ratchthani Leasing

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

The idea behind Ratchaphruek Hospital Public and Ratchthani Leasing 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.