Correlation Between THONBURI HEALTHCARE and Bumrungrad Hospital

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

By analyzing existing cross correlation between THONBURI HEALTHCARE GRO NVDR and Bumrungrad Hospital PCL, you can compare the effects of market volatilities on THONBURI HEALTHCARE and Bumrungrad 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 THONBURI HEALTHCARE with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of THONBURI HEALTHCARE and Bumrungrad Hospital.

Diversification Opportunities for THONBURI HEALTHCARE and Bumrungrad Hospital

0.69

Correlation Coefficient

THONBURI HEALTHCARE  Bumrungrad Hospital

Poor diversification

The 3 months correlation between THONBURI and Bumrungrad is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding THONBURI HEALTHCARE GRO NVDR and Bumrungrad Hospital PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital PCL and THONBURI HEALTHCARE 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 THONBURI HEALTHCARE GRO NVDR are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital PCL has no effect on the direction of THONBURI HEALTHCARE i.e., THONBURI HEALTHCARE and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between THONBURI HEALTHCARE and Bumrungrad Hospital

Assuming the 90 days trading horizon THONBURI HEALTHCARE GRO NVDR is expected to under-perform the Bumrungrad Hospital. In addition to that, THONBURI HEALTHCARE is 2.15 times more volatile than Bumrungrad Hospital PCL. It trades about -0.19 of its total potential returns per unit of risk. Bumrungrad Hospital PCL is currently generating about -0.06 per unit of volatility. If you would invest  21,100  in Bumrungrad Hospital PCL on December 4, 2024 and sell it today you would lose (1,600) from holding Bumrungrad Hospital PCL or give up 7.58% of portfolio value over 90 days.

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

THONBURI HEALTHCARE GRO NVDR  vs.  Bumrungrad Hospital PCL

THONBURI HEALTHCARE GRO

Risk-Adjusted Performance

Very Weak

Over the last 90 days THONBURI HEALTHCARE GRO NVDR 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bumrungrad Hospital PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bumrungrad Hospital PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.

Pair Trading with THONBURI HEALTHCARE and Bumrungrad Hospital

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

The idea behind THONBURI HEALTHCARE GRO NVDR and Bumrungrad Hospital PCL 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.