Correlation Between Patrangsit Healthcare and DOHOME

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

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

Diversification Opportunities for Patrangsit Healthcare and DOHOME

0.47

Correlation Coefficient

Patrangsit Healthcare  DOHOME

Very weak diversification

The 3 months correlation between Patrangsit and DOHOME is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Patrangsit Healthcare Group and DOHOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOHOME and Patrangsit Healthcare 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 Patrangsit Healthcare Group are associated (or correlated) with DOHOME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOHOME has no effect on the direction of Patrangsit Healthcare i.e., Patrangsit Healthcare and DOHOME go up and down completely randomly.

Pair Corralation between Patrangsit Healthcare and DOHOME

Assuming the 90 days trading horizon Patrangsit Healthcare Group is expected to generate 0.69 times more return on investment than DOHOME. However, Patrangsit Healthcare Group is 1.45 times less risky than DOHOME. It trades about -0.04 of its potential returns per unit of risk. DOHOME is currently generating about -0.04 per unit of risk. If you would invest  1,620  in Patrangsit Healthcare Group on September 13, 2024 and sell it today you would lose (60.00) from holding Patrangsit Healthcare Group or give up 3.7% of portfolio value over 90 days.

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

Patrangsit Healthcare Group  vs.  DOHOME

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.

DOHOME

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DOHOME has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, DOHOME is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Patrangsit Healthcare and DOHOME

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

The idea behind Patrangsit Healthcare Group and DOHOME 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.