Correlation Between Ratchaphruek Hospital and Rajthanee Hospital

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

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

Diversification Opportunities for Ratchaphruek Hospital and Rajthanee Hospital

0.98

Correlation Coefficient

Ratchaphruek Hospital  Rajthanee Hospital

Almost no diversification

The 3 months correlation between Ratchaphruek and Rajthanee is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ratchaphruek Hospital Public and Rajthanee Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajthanee Hospital Public and Ratchaphruek Hospital 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 Ratchaphruek Hospital Public are associated (or correlated) with Rajthanee Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajthanee Hospital Public has no effect on the direction of Ratchaphruek Hospital i.e., Ratchaphruek Hospital and Rajthanee Hospital go up and down completely randomly.

Pair Corralation between Ratchaphruek Hospital and Rajthanee Hospital

Assuming the 90 days trading horizon Ratchaphruek Hospital is expected to generate 1.0 times less return on investment than Rajthanee Hospital. But when comparing it to its historical volatility, Ratchaphruek Hospital Public is 1.0 times less risky than Rajthanee Hospital. It trades about 0.11 of its potential returns per unit of risk. Rajthanee Hospital Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,300  in Rajthanee Hospital Public on September 2, 2024 and sell it today you would lose (80.00) from holding Rajthanee Hospital Public or give up 3.48% of portfolio value over 90 days.

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

Ratchaphruek Hospital Public  vs.  Rajthanee Hospital Public

Ratchaphruek Hospital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ratchaphruek Hospital Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical indicators, Ratchaphruek Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Rajthanee Hospital Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rajthanee Hospital Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical indicators, Rajthanee Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ratchaphruek Hospital and Rajthanee Hospital

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

The idea behind Ratchaphruek Hospital Public and Rajthanee 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 Stocks Directory module to find actively traded stocks across global markets.