Correlation Between Perusahaan Perseroan and Bumrungrad Hospital

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

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

Diversification Opportunities for Perusahaan Perseroan and Bumrungrad Hospital

0.71

Correlation Coefficient

Perusahaan Perseroan  Bumrungrad Hospital

Poor diversification

The 3 months correlation between Perusahaan and Bumrungrad is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Perusahaan Perseroan 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 Perusahaan Perseroan PT 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 Perusahaan Perseroan i.e., Perusahaan Perseroan and Bumrungrad Hospital go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and Bumrungrad Hospital

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to generate 1.15 times more return on investment than Bumrungrad Hospital. However, Perusahaan Perseroan is 1.15 times more volatile than Bumrungrad Hospital Public. It trades about -0.03 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.06 per unit of risk. If you would invest  1,730  in Perusahaan Perseroan PT on September 3, 2024 and sell it today you would lose (140.00) from holding Perusahaan Perseroan PT or give up 8.09% of portfolio value over 90 days.

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

Perusahaan Perseroan PT  vs.  Bumrungrad Hospital Public

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Perusahaan Perseroan and Bumrungrad Hospital

The main advantage of trading using opposite Perusahaan Perseroan and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Perseroan 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 Perusahaan Perseroan PT 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.