Correlation Between Natural Health and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Ramsay Health Care, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Ramsay Health.
Diversification Opportunities for Natural Health and Ramsay Health
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Ramsay is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends 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 Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Ramsay Health go up and down completely randomly.
Pair Corralation between Natural Health and Ramsay Health
Assuming the 90 days trading horizon Natural Health Trends is expected to generate 1.83 times more return on investment than Ramsay Health. However, Natural Health is 1.83 times more volatile than Ramsay Health Care. It trades about 0.05 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.17 per unit of risk. If you would invest 512.00 in Natural Health Trends on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Natural Health Trends or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Ramsay Health Care
Performance |
| Timeline |
| Natural Health Trends |
| Ramsay Health Care |
Natural Health and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Ramsay Health
The main advantage of trading using opposite Natural Health and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. COMBA TELECOM SYST | Natural Health vs. EAGLE MATERIALS | Natural Health vs. Cogent Communications Holdings | Natural Health vs. SK TELECOM TDADR |
| Ramsay Health vs. Laureate Education | Ramsay Health vs. BLUESCOPE STEEL | Ramsay Health vs. BlueScope Steel Limited | Ramsay Health vs. IDP EDUCATION LTD |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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