Correlation Between MUTUIONLINE and Bumrungrad Hospital

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

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

Diversification Opportunities for MUTUIONLINE and Bumrungrad Hospital

-0.82

Correlation Coefficient

MUTUIONLINE  Bumrungrad Hospital

Pay attention - limited upside

The 3 months correlation between MUTUIONLINE and Bumrungrad is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding MUTUIONLINE and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE i.e., MUTUIONLINE and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between MUTUIONLINE and Bumrungrad Hospital

Assuming the 90 days trading horizon MUTUIONLINE is expected to generate 4.78 times less return on investment than Bumrungrad Hospital. But when comparing it to its historical volatility, MUTUIONLINE is 3.38 times less risky than Bumrungrad Hospital. It trades about 0.05 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Bumrungrad Hospital Public on September 12, 2024 and sell it today you would earn a total of  469.00  from holding Bumrungrad Hospital Public or generate 579.01% return on investment over 90 days.

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

MUTUIONLINE  vs.  Bumrungrad Hospital Public

MUTUIONLINE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MUTUIONLINE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, MUTUIONLINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 MUTUIONLINE and Bumrungrad Hospital

The main advantage of trading using opposite MUTUIONLINE and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUTUIONLINE 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 MUTUIONLINE 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.