Correlation Between Host Hotels and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Host Hotels 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 Host Hotels and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Ramsay Health Care, you can compare the effects of market volatilities on Host Hotels 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 Host Hotels with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Ramsay Health.
Diversification Opportunities for Host Hotels and Ramsay Health
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Host and Ramsay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts 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 Host Hotels 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 Host Hotels Resorts 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 Host Hotels i.e., Host Hotels and Ramsay Health go up and down completely randomly.
Pair Corralation between Host Hotels and Ramsay Health
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 1.12 times more return on investment than Ramsay Health. However, Host Hotels is 1.12 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 -0.08 per unit of risk. If you would invest 1,660 in Host Hotels Resorts on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Host Hotels Resorts or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Ramsay Health Care
Performance |
| Timeline |
| Host Hotels Resorts |
| Ramsay Health Care |
Host Hotels and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Ramsay Health
The main advantage of trading using opposite Host Hotels and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels 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.| Host Hotels vs. Richardson Electronics | Host Hotels vs. ECHO INVESTMENT ZY | Host Hotels vs. EAT WELL INVESTMENT | Host Hotels vs. Renesas Electronics |
| Ramsay Health vs. Yanzhou Coal Mining | Ramsay Health vs. PLAYMATES TOYS | Ramsay Health vs. MINCO SILVER | Ramsay Health vs. FRACTAL GAMING 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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