Correlation Between Bumrungrad Hospital and Eternal Energy
Can any of the company-specific risk be diversified away by investing in both Bumrungrad Hospital and Eternal Energy 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 Bumrungrad Hospital and Eternal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumrungrad Hospital Public and Eternal Energy Public, you can compare the effects of market volatilities on Bumrungrad Hospital and Eternal Energy 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 Bumrungrad Hospital with a short position of Eternal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumrungrad Hospital and Eternal Energy.
Diversification Opportunities for Bumrungrad Hospital and Eternal Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bumrungrad and Eternal is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bumrungrad Hospital Public and Eternal Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eternal Energy Public and Bumrungrad 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 Bumrungrad Hospital Public are associated (or correlated) with Eternal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eternal Energy Public has no effect on the direction of Bumrungrad Hospital i.e., Bumrungrad Hospital and Eternal Energy go up and down completely randomly.
Pair Corralation between Bumrungrad Hospital and Eternal Energy
Assuming the 90 days horizon Bumrungrad Hospital Public is expected to under-perform the Eternal Energy. But the stock apears to be less risky and, when comparing its historical volatility, Bumrungrad Hospital Public is 5.2 times less risky than Eternal Energy. The stock trades about -0.28 of its potential returns per unit of risk. The Eternal Energy Public is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Eternal Energy Public on September 17, 2024 and sell it today you would earn a total of 41.00 from holding Eternal Energy Public or generate 241.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bumrungrad Hospital Public vs. Eternal Energy Public
Performance |
Timeline |
Bumrungrad Hospital |
Eternal Energy Public |
Bumrungrad Hospital and Eternal Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bumrungrad Hospital and Eternal Energy
The main advantage of trading using opposite Bumrungrad Hospital and Eternal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumrungrad Hospital position performs unexpectedly, Eternal Energy 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 Eternal Energy will offset losses from the drop in Eternal Energy's long position.Bumrungrad Hospital vs. Bangkok Dusit Medical | Bumrungrad Hospital vs. CP ALL Public | Bumrungrad Hospital vs. Central Pattana Public | Bumrungrad Hospital vs. Airports of Thailand |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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