Correlation Between Ramsay Health and Bangkok Dusit

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

By analyzing existing cross correlation between Ramsay Health Care and Bangkok Dusit Medical, you can compare the effects of market volatilities on Ramsay Health and Bangkok Dusit 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 Ramsay Health with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Bangkok Dusit.

Diversification Opportunities for Ramsay Health and Bangkok Dusit

0.23

Correlation Coefficient

Ramsay Health  Bangkok Dusit

Modest diversification

The 3 months correlation between Ramsay and Bangkok is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and Ramsay Health 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 Ramsay Health Care are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Ramsay Health i.e., Ramsay Health and Bangkok Dusit go up and down completely randomly.

Pair Corralation between Ramsay Health and Bangkok Dusit

If you would invest  73.00  in Bangkok Dusit Medical on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Bangkok Dusit Medical or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Ramsay Health Care  vs.  Bangkok Dusit Medical

Ramsay Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramsay Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bangkok Dusit Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ramsay Health and Bangkok Dusit

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

The idea behind Ramsay Health Care and Bangkok Dusit Medical 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.