Correlation Between Sikarin Public and Vibhavadi Medical

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

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

Diversification Opportunities for Sikarin Public and Vibhavadi Medical

-0.06

Correlation Coefficient

Sikarin Public  Vibhavadi Medical

Good diversification

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

Pair Corralation between Sikarin Public and Vibhavadi Medical

Assuming the 90 days trading horizon Sikarin Public is expected to generate 6.5 times less return on investment than Vibhavadi Medical. But when comparing it to its historical volatility, Sikarin Public is 2.56 times less risky than Vibhavadi Medical. It trades about 0.07 of its potential returns per unit of risk. Vibhavadi Medical Center is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Vibhavadi Medical Center on January 29, 2024 and sell it today you would earn a total of  14.00  from holding Vibhavadi Medical Center or generate 6.54% return on investment over 90 days.

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

Sikarin Public  vs.  Vibhavadi Medical Center

Sikarin Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vibhavadi Medical Center

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vibhavadi Medical Center are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vibhavadi Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sikarin Public and Vibhavadi Medical

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

The idea behind Sikarin Public and Vibhavadi Medical Center 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.