Correlation Between Bendigo and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Bendigo and Ramsay Health 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 Bendigo and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bendigo and Adelaide and Ramsay Health Care, you can compare the effects of market volatilities on Bendigo and Ramsay Health 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 Bendigo with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Ramsay Health.
Diversification Opportunities for Bendigo and Ramsay Health
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bendigo and Ramsay is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo and Adelaide and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care and Bendigo 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 Bendigo and Adelaide are associated (or correlated) with Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of Bendigo i.e., Bendigo and Ramsay Health go up and down completely randomly.
Pair Corralation between Bendigo and Ramsay Health
Assuming the 90 days trading horizon Bendigo and Adelaide is expected to generate 0.22 times more return on investment than Ramsay Health. However, Bendigo and Adelaide is 4.5 times less risky than Ramsay Health. It trades about -0.05 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.12 per unit of risk. If you would invest 10,340 in Bendigo and Adelaide on January 9, 2025 and sell it today you would lose (64.00) from holding Bendigo and Adelaide or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bendigo and Adelaide vs. Ramsay Health Care
Performance |
| Timeline |
| Bendigo and Adelaide |
| Ramsay Health Care |
Bendigo and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bendigo and Ramsay Health
The main advantage of trading using opposite Bendigo and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo position performs unexpectedly, Ramsay Health 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 Ramsay Health will offset losses from the drop in Ramsay Health's long position.| Bendigo vs. Southern Cross Media | Bendigo vs. Vulcan Steel | Bendigo vs. Aussie Broadband | Bendigo vs. Pearl Gull Iron |
| Ramsay Health vs. Insurance Australia Group | Ramsay Health vs. ACDC Metals | Ramsay Health vs. Polymetals Resources | Ramsay Health vs. Aeon Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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