Correlation Between Medical Facilities and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Medical Facilities 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 Medical Facilities and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and Ramsay Health Care, you can compare the effects of market volatilities on Medical Facilities 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 Medical Facilities with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and Ramsay Health.
Diversification Opportunities for Medical Facilities and Ramsay Health
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and Ramsay is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities 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 Medical Facilities 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 Medical Facilities 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 Medical Facilities i.e., Medical Facilities and Ramsay Health go up and down completely randomly.
Pair Corralation between Medical Facilities and Ramsay Health
Assuming the 90 days horizon Medical Facilities is expected to generate 1.22 times more return on investment than Ramsay Health. However, Medical Facilities is 1.22 times more volatile than Ramsay Health Care. It trades about 0.12 of its potential returns per unit of risk. Ramsay Health Care is currently generating about 0.01 per unit of risk. If you would invest 664.00 in Medical Facilities on September 4, 2024 and sell it today you would earn a total of 450.00 from holding Medical Facilities or generate 67.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.86% |
| Values | Daily Returns |
Medical Facilities vs. Ramsay Health Care
Performance |
| Timeline |
| Medical Facilities |
| Ramsay Health Care |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Medical Facilities and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and Ramsay Health
The main advantage of trading using opposite Medical Facilities and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities 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.| Medical Facilities vs. Jack Nathan Medical | Medical Facilities vs. Fresenius SE Co | Medical Facilities vs. Ramsay Health Care | Medical Facilities vs. Pennant Group |
| Ramsay Health vs. Fresenius SE Co | Ramsay Health vs. Life Healthcare Group | Ramsay Health vs. Select Medical Holdings | Ramsay Health vs. Ramsay Health Care |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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