Correlation Between BKI Investment and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both BKI Investment 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 BKI Investment and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Ramsay Health Care, you can compare the effects of market volatilities on BKI Investment 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 BKI Investment with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Ramsay Health.
Diversification Opportunities for BKI Investment and Ramsay Health
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BKI and Ramsay is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment 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 BKI Investment 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 BKI Investment 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 BKI Investment i.e., BKI Investment and Ramsay Health go up and down completely randomly.
Pair Corralation between BKI Investment and Ramsay Health
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.26 times more return on investment than Ramsay Health. However, BKI Investment is 3.84 times less risky than Ramsay Health. It trades about -0.06 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.02 per unit of risk. If you would invest 172.00 in BKI Investment on September 13, 2024 and sell it today you would lose (1.00) from holding BKI Investment or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Ramsay Health Care
Performance |
| Timeline |
| BKI Investment |
| Ramsay Health Care |
BKI Investment and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Ramsay Health
The main advantage of trading using opposite BKI Investment and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment 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.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
| Ramsay Health vs. Nufarm | Ramsay Health vs. Insignia Financial | Ramsay Health vs. Yowie Group | Ramsay Health vs. FleetPartners Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |