Correlation Between Chongqing Machinery and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery 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 Chongqing Machinery and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and Ramsay Health Care, you can compare the effects of market volatilities on Chongqing Machinery 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 Chongqing Machinery with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Ramsay Health.
Diversification Opportunities for Chongqing Machinery and Ramsay Health
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chongqing and Ramsay is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric 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 Chongqing Machinery 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 Chongqing Machinery Electric 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 Chongqing Machinery i.e., Chongqing Machinery and Ramsay Health go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Ramsay Health
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 3.72 times more return on investment than Ramsay Health. However, Chongqing Machinery is 3.72 times more volatile than Ramsay Health Care. It trades about 0.07 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 2.24 in Chongqing Machinery Electric on September 23, 2024 and sell it today you would earn a total of 5.66 from holding Chongqing Machinery Electric or generate 252.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Ramsay Health Care
Performance |
| Timeline |
| Chongqing Machinery |
| Ramsay Health Care |
Chongqing Machinery and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Ramsay Health
The main advantage of trading using opposite Chongqing Machinery and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery 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.| Chongqing Machinery vs. Honeywell International | Chongqing Machinery vs. Schneider Electric SE | Chongqing Machinery vs. Illinois Tool Works | Chongqing Machinery vs. Eaton PLC |
| Ramsay Health vs. KOOL2PLAY SA ZY | Ramsay Health vs. BANKINTER ADR 2007 | Ramsay Health vs. OAKTRSPECLENDNEW | Ramsay Health vs. The Hanover Insurance |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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