Correlation Between Sri Panwa and Ratchaphruek Hospital

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

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

Diversification Opportunities for Sri Panwa and Ratchaphruek Hospital

-0.31

Correlation Coefficient

Sri Panwa  Ratchaphruek Hospital

Very good diversification

The 3 months correlation between Sri and Ratchaphruek is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sri panwa Hospitality and Ratchaphruek Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchaphruek Hospital and Sri Panwa 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 Sri panwa Hospitality are associated (or correlated) with Ratchaphruek Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchaphruek Hospital has no effect on the direction of Sri Panwa i.e., Sri Panwa and Ratchaphruek Hospital go up and down completely randomly.

Pair Corralation between Sri Panwa and Ratchaphruek Hospital

Assuming the 90 days trading horizon Sri panwa Hospitality is expected to generate 3.03 times more return on investment than Ratchaphruek Hospital. However, Sri Panwa is 3.03 times more volatile than Ratchaphruek Hospital Public. It trades about 0.15 of its potential returns per unit of risk. Ratchaphruek Hospital Public is currently generating about -0.21 per unit of risk. If you would invest  496.00  in Sri panwa Hospitality on September 13, 2024 and sell it today you would earn a total of  79.00  from holding Sri panwa Hospitality or generate 15.93% return on investment over 90 days.

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

Sri panwa Hospitality  vs.  Ratchaphruek Hospital Public

Sri panwa Hospitality

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sri panwa Hospitality are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sri Panwa showed solid returns over the last few months and may actually be approaching a breakup point.

Ratchaphruek Hospital

Risk-Adjusted Performance

0 of 100

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 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 Sri Panwa and Ratchaphruek Hospital

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

The idea behind Sri panwa Hospitality and Ratchaphruek Hospital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.