Correlation Between Credit Clear and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Credit Clear 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 Credit Clear and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Clear and Ramsay Health Care, you can compare the effects of market volatilities on Credit Clear 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 Credit Clear with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Clear and Ramsay Health.
Diversification Opportunities for Credit Clear and Ramsay Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Credit and Ramsay is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Credit Clear 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 Credit Clear 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 Credit Clear 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 Credit Clear i.e., Credit Clear and Ramsay Health go up and down completely randomly.
Pair Corralation between Credit Clear and Ramsay Health
Assuming the 90 days trading horizon Credit Clear is expected to generate 2.77 times more return on investment than Ramsay Health. However, Credit Clear is 2.77 times more volatile than Ramsay Health Care. It trades about 0.01 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.05 per unit of risk. If you would invest 42.00 in Credit Clear on September 5, 2024 and sell it today you would lose (7.00) from holding Credit Clear or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Credit Clear vs. Ramsay Health Care
Performance |
| Timeline |
| Credit Clear |
| Ramsay Health Care |
Credit Clear and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Clear and Ramsay Health
The main advantage of trading using opposite Credit Clear and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Clear 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.| Credit Clear vs. Aneka Tambang Tbk | Credit Clear vs. Commonwealth Bank of | Credit Clear vs. Australia and New | Credit Clear vs. ANZ Group Holdings |
| Ramsay Health vs. Macquarie Group | Ramsay Health vs. Macquarie Group Ltd | Ramsay Health vs. Commonwealth Bank | Ramsay Health vs. Rio Tinto |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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