Correlation Between Platinum Asset and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Platinum Asset 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 Platinum Asset and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asset Management and Ramsay Health Care, you can compare the effects of market volatilities on Platinum Asset 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 Platinum Asset with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Ramsay Health.
Diversification Opportunities for Platinum Asset and Ramsay Health
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Ramsay is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management 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 Platinum Asset 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 Platinum Asset Management 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 Platinum Asset i.e., Platinum Asset and Ramsay Health go up and down completely randomly.
Pair Corralation between Platinum Asset and Ramsay Health
Assuming the 90 days trading horizon Platinum Asset Management is expected to generate 7.23 times more return on investment than Ramsay Health. However, Platinum Asset is 7.23 times more volatile than Ramsay Health Care. It trades about 0.09 of its potential returns per unit of risk. Ramsay Health Care is currently generating about 0.25 per unit of risk. If you would invest 67.00 in Platinum Asset Management on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Platinum Asset Management or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Ramsay Health Care
Performance |
| Timeline |
| Platinum Asset Management |
| Ramsay Health Care |
Platinum Asset and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Ramsay Health
The main advantage of trading using opposite Platinum Asset and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset 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.| Platinum Asset vs. Collins Foods | Platinum Asset vs. Insurance Australia Group | Platinum Asset vs. Balkan Mining and | Platinum Asset vs. De Grey Mining |
| Ramsay Health vs. Apiam Animal Health | Ramsay Health vs. Ramsay Health Care | Ramsay Health vs. Fisher Paykel Healthcare | Ramsay Health vs. Gold Road Resources |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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