Correlation Between Macquarie Technology and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology 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 Macquarie Technology and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Technology Group and Ramsay Health Care, you can compare the effects of market volatilities on Macquarie Technology 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 Macquarie Technology with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Ramsay Health.
Diversification Opportunities for Macquarie Technology and Ramsay Health
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macquarie and Ramsay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group 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 Macquarie Technology 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 Macquarie Technology Group 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 Macquarie Technology i.e., Macquarie Technology and Ramsay Health go up and down completely randomly.
Pair Corralation between Macquarie Technology and Ramsay Health
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 5.66 times more return on investment than Ramsay Health. However, Macquarie Technology is 5.66 times more volatile than Ramsay Health Care. It trades about 0.06 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 5,742 in Macquarie Technology Group on September 3, 2024 and sell it today you would earn a total of 3,055 from holding Macquarie Technology Group or generate 53.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Ramsay Health Care
Performance |
| Timeline |
| Macquarie Technology |
| Ramsay Health Care |
Macquarie Technology and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Ramsay Health
The main advantage of trading using opposite Macquarie Technology and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology 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.| Macquarie Technology vs. Encounter Resources | Macquarie Technology vs. Tlou Energy | Macquarie Technology vs. Superior Resources | Macquarie Technology vs. Peel Mining |
| Ramsay Health vs. Argo Investments | Ramsay Health vs. Diversified United Investment | Ramsay Health vs. Energy Technologies Limited | Ramsay Health vs. Macquarie Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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