Correlation Between CVW CLEANTECH and Bumrungrad Hospital

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

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

Diversification Opportunities for CVW CLEANTECH and Bumrungrad Hospital

0.43

Correlation Coefficient

CVW CLEANTECH  Bumrungrad Hospital

Very weak diversification

The 3 months correlation between CVW and Bumrungrad is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and CVW CLEANTECH 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 CVW CLEANTECH INC 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 has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and Bumrungrad Hospital

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the Bumrungrad Hospital. In addition to that, CVW CLEANTECH is 1.03 times more volatile than Bumrungrad Hospital Public. It trades about -0.03 of its total potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.02 per unit of volatility. If you would invest  575.00  in Bumrungrad Hospital Public on December 3, 2024 and sell it today you would lose (35.00) from holding Bumrungrad Hospital Public or give up 6.09% of portfolio value over 90 days.

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

CVW CLEANTECH INC  vs.  Bumrungrad Hospital Public

CVW CLEANTECH INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVW CLEANTECH INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, CVW CLEANTECH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Bumrungrad Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bumrungrad Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bumrungrad Hospital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CVW CLEANTECH and Bumrungrad Hospital

The main advantage of trading using opposite CVW CLEANTECH and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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 CVW CLEANTECH INC and Bumrungrad 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.