Correlation Between PM Capital and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both PM Capital 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 PM Capital and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PM Capital Global and Ramsay Health Care, you can compare the effects of market volatilities on PM Capital 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 PM Capital with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PM Capital and Ramsay Health.
Diversification Opportunities for PM Capital and Ramsay Health
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between PGF and Ramsay is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PM Capital Global 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 PM Capital 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 PM Capital Global 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 PM Capital i.e., PM Capital and Ramsay Health go up and down completely randomly.
Pair Corralation between PM Capital and Ramsay Health
Assuming the 90 days trading horizon PM Capital Global is expected to generate 0.87 times more return on investment than Ramsay Health. However, PM Capital Global is 1.15 times less risky than Ramsay Health. It trades about 0.07 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.05 per unit of risk. If you would invest 166.00 in PM Capital Global on September 1, 2024 and sell it today you would earn a total of 62.00 from holding PM Capital Global or generate 37.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
PM Capital Global vs. Ramsay Health Care
Performance |
| Timeline |
| PM Capital Global |
| Ramsay Health Care |
PM Capital and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PM Capital and Ramsay Health
The main advantage of trading using opposite PM Capital and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PM Capital 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.| PM Capital vs. Skycity Entertainment Group | PM Capital vs. Retail Food Group | PM Capital vs. Truscott Mining Corp | PM Capital vs. Autosports Group |
| Ramsay Health vs. Aneka Tambang Tbk | Ramsay Health vs. ANZ Group Holdings | Ramsay Health vs. Australia and New | Ramsay Health vs. ANZ Group Holdings |
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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