Correlation Between SBM OFFSHORE and Bumrungrad Hospital

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

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

Diversification Opportunities for SBM OFFSHORE and Bumrungrad Hospital

-0.59

Correlation Coefficient

SBM OFFSHORE  Bumrungrad Hospital

Excellent diversification

The 3 months correlation between SBM and Bumrungrad is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE i.e., SBM OFFSHORE and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between SBM OFFSHORE and Bumrungrad Hospital

Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.57 times more return on investment than Bumrungrad Hospital. However, SBM OFFSHORE is 1.76 times less risky than Bumrungrad Hospital. It trades about 0.03 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.09 per unit of risk. If you would invest  1,636  in SBM OFFSHORE on September 5, 2024 and sell it today you would earn a total of  40.00  from holding SBM OFFSHORE or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

SBM OFFSHORE  vs.  Bumrungrad Hospital Public

SBM OFFSHORE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SBM OFFSHORE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, SBM OFFSHORE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SBM OFFSHORE and Bumrungrad Hospital

The main advantage of trading using opposite SBM OFFSHORE and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE 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 SBM OFFSHORE 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.