Correlation Between BURLINGTON STORES and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES 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 BURLINGTON STORES and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Ramsay Health Care, you can compare the effects of market volatilities on BURLINGTON STORES 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 BURLINGTON STORES with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Ramsay Health.
Diversification Opportunities for BURLINGTON STORES and Ramsay Health
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BURLINGTON and Ramsay is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES 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 BURLINGTON STORES 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 BURLINGTON STORES 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 BURLINGTON STORES i.e., BURLINGTON STORES and Ramsay Health go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Ramsay Health
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.36 times more return on investment than Ramsay Health. However, BURLINGTON STORES is 1.36 times more volatile than Ramsay Health Care. It trades about 0.1 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.07 per unit of risk. If you would invest 16,300 in BURLINGTON STORES on November 5, 2024 and sell it today you would earn a total of 11,900 from holding BURLINGTON STORES or generate 73.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Ramsay Health Care
Performance |
| Timeline |
| BURLINGTON STORES |
| Ramsay Health Care |
BURLINGTON STORES and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Ramsay Health
The main advantage of trading using opposite BURLINGTON STORES and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES 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.| BURLINGTON STORES vs. Planet Fitness | BURLINGTON STORES vs. Nok Airlines PCL | BURLINGTON STORES vs. Phibro Animal Health | BURLINGTON STORES vs. Siemens Healthineers AG |
| Ramsay Health vs. H2O Retailing | Ramsay Health vs. Tradegate AG Wertpapierhandelsbank | Ramsay Health vs. FLOW TRADERS LTD | Ramsay Health vs. Methode Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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