Correlation Between CDN IMPERIAL and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL 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 CDN IMPERIAL and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN IMPERIAL BANK and Ramsay Health Care, you can compare the effects of market volatilities on CDN IMPERIAL 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 CDN IMPERIAL with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Ramsay Health.
Diversification Opportunities for CDN IMPERIAL and Ramsay Health
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between CDN and Ramsay is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK 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 CDN IMPERIAL 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 CDN IMPERIAL BANK 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 CDN IMPERIAL i.e., CDN IMPERIAL and Ramsay Health go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Ramsay Health
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.76 times more return on investment than Ramsay Health. However, CDN IMPERIAL BANK is 1.32 times less risky than Ramsay Health. It trades about 0.09 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.08 per unit of risk. If you would invest 3,600 in CDN IMPERIAL BANK on October 28, 2024 and sell it today you would earn a total of 2,447 from holding CDN IMPERIAL BANK or generate 67.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Ramsay Health Care
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Ramsay Health Care |
CDN IMPERIAL and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Ramsay Health
The main advantage of trading using opposite CDN IMPERIAL and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL 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.| CDN IMPERIAL vs. Beta Systems Software | CDN IMPERIAL vs. High Liner Foods | CDN IMPERIAL vs. Vishay Intertechnology | CDN IMPERIAL vs. Cal Maine Foods |
| Ramsay Health vs. SOCKET MOBILE NEW | Ramsay Health vs. Broadcom | Ramsay Health vs. Ribbon Communications | Ramsay Health vs. Verizon Communications |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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