Correlation Between Wattanapat Hospital and Bumrungrad Hospital

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

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

Diversification Opportunities for Wattanapat Hospital and Bumrungrad Hospital

0.81

Correlation Coefficient

Wattanapat Hospital  Bumrungrad Hospital

Very poor diversification

The 3 months correlation between Wattanapat and Bumrungrad is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Wattanapat 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 Wattanapat Hospital Trang 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 Wattanapat Hospital i.e., Wattanapat Hospital and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between Wattanapat Hospital and Bumrungrad Hospital

Assuming the 90 days trading horizon Wattanapat Hospital Trang is expected to generate 1.12 times more return on investment than Bumrungrad Hospital. However, Wattanapat Hospital is 1.12 times more volatile than Bumrungrad Hospital Public. It trades about -0.1 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.27 per unit of risk. If you would invest  1,080  in Wattanapat Hospital Trang on September 13, 2024 and sell it today you would lose (145.00) from holding Wattanapat Hospital Trang or give up 13.43% of portfolio value over 90 days.

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

Wattanapat Hospital Trang  vs.  Bumrungrad Hospital Public

Wattanapat Hospital Trang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wattanapat Hospital Trang 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 technical indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bumrungrad Hospital

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Wattanapat Hospital and Bumrungrad Hospital

The main advantage of trading using opposite Wattanapat Hospital and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat Hospital 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 Wattanapat Hospital Trang 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.