Correlation Between RS Public and Ladprao General

Can any of the company-specific risk be diversified away by investing in both RS Public and Ladprao General 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 RS Public and Ladprao General into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for RS Public and Ladprao General

0.45

Correlation Coefficient

RS Public  Ladprao General

Very weak diversification

The 3 months correlation between RS Public and Ladprao is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding RS Public and Ladprao General Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladprao General Hospital and RS Public 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 RS Public are associated (or correlated) with Ladprao General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladprao General Hospital has no effect on the direction of RS Public i.e., RS Public and Ladprao General go up and down completely randomly.

Pair Corralation between RS Public and Ladprao General

Assuming the 90 days horizon RS Public is expected to under-perform the Ladprao General. But the stock apears to be less risky and, when comparing its historical volatility, RS Public is 1.14 times less risky than Ladprao General. The stock trades about -0.52 of its potential returns per unit of risk. The Ladprao General Hospital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  428.00  in Ladprao General Hospital on October 6, 2024 and sell it today you would earn a total of  4.00  from holding Ladprao General Hospital or generate 0.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

RS Public  vs.  Ladprao General Hospital

RS Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RS Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Ladprao General Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladprao General Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with RS Public and Ladprao General

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

The idea behind RS Public and Ladprao General Hospital 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.