Correlation Between Muang Thai and Patrangsit Healthcare

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

By analyzing existing cross correlation between Muang Thai Insurance and Patrangsit Healthcare Group, you can compare the effects of market volatilities on Muang Thai and Patrangsit Healthcare 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 Muang Thai with a short position of Patrangsit Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muang Thai and Patrangsit Healthcare.

Diversification Opportunities for Muang Thai and Patrangsit Healthcare

0.06

Correlation Coefficient

Muang Thai  Patrangsit Healthcare

Significant diversification

The 3 months correlation between Muang and Patrangsit is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance and Patrangsit Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patrangsit Healthcare and Muang Thai 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 Muang Thai Insurance are associated (or correlated) with Patrangsit Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patrangsit Healthcare has no effect on the direction of Muang Thai i.e., Muang Thai and Patrangsit Healthcare go up and down completely randomly.

Pair Corralation between Muang Thai and Patrangsit Healthcare

Assuming the 90 days trading horizon Muang Thai Insurance is expected to generate 0.61 times more return on investment than Patrangsit Healthcare. However, Muang Thai Insurance is 1.63 times less risky than Patrangsit Healthcare. It trades about -0.02 of its potential returns per unit of risk. Patrangsit Healthcare Group is currently generating about -0.03 per unit of risk. If you would invest  10,700  in Muang Thai Insurance on September 5, 2024 and sell it today you would lose (150.00) from holding Muang Thai Insurance or give up 1.4% of portfolio value over 90 days.

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

Muang Thai Insurance  vs.  Patrangsit Healthcare Group

Muang Thai Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muang Thai Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Muang Thai is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Patrangsit Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patrangsit Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Patrangsit Healthcare is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Muang Thai and Patrangsit Healthcare

The main advantage of trading using opposite Muang Thai and Patrangsit Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muang Thai position performs unexpectedly, Patrangsit Healthcare 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 Patrangsit Healthcare will offset losses from the drop in Patrangsit Healthcare's long position.

The idea behind Muang Thai Insurance and Patrangsit Healthcare Group 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.