Correlation Between Airports and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Airports 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 Airports and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airports of Thailand and Ramsay Health Care, you can compare the effects of market volatilities on Airports 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 Airports with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Ramsay Health.
Diversification Opportunities for Airports and Ramsay Health
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Ramsay is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand 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 Airports 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 Airports of Thailand 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 Airports i.e., Airports and Ramsay Health go up and down completely randomly.
Pair Corralation between Airports and Ramsay Health
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 1.48 times more return on investment than Ramsay Health. However, Airports is 1.48 times more volatile than Ramsay Health Care. It trades about 0.02 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.06 per unit of risk. If you would invest 152.00 in Airports of Thailand on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Airports of Thailand or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Ramsay Health Care
Performance |
| Timeline |
| Airports of Thailand |
| Ramsay Health Care |
Airports and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Ramsay Health
The main advantage of trading using opposite Airports and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports 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.| Airports vs. Diamondrock Hospitality Co | Airports vs. Zijin Mining Group | Airports vs. EPSILON HEALTHCARE LTD | Airports vs. GALENA MINING LTD |
| Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. NMI Holdings | Ramsay Health vs. Origin Agritech | Ramsay Health vs. SIVERS SEMICONDUCTORS AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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