Correlation Between Ramsay Health and Ainsworth Game

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Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Ainsworth Game 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 Ramsay Health and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramsay Health Care and Ainsworth Game Technology, you can compare the effects of market volatilities on Ramsay Health and Ainsworth Game 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 Ramsay Health with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Ainsworth Game.

Diversification Opportunities for Ramsay Health and Ainsworth Game

RamsayAinsworthDiversified AwayRamsayAinsworthDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Ramsay and Ainsworth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Ramsay 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 Ramsay Health Care are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Ramsay Health i.e., Ramsay Health and Ainsworth Game go up and down completely randomly.

Pair Corralation between Ramsay Health and Ainsworth Game

Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Ainsworth Game. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 2.17 times less risky than Ainsworth Game. The stock trades about -0.07 of its potential returns per unit of risk. The Ainsworth Game Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Ainsworth Game Technology on November 30, 2024 and sell it today you would lose (12.00) from holding Ainsworth Game Technology or give up 11.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ramsay Health Care  vs.  Ainsworth Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505101520
JavaScript chart by amCharts 3.21.15RHC AGI
       Timeline  
Ramsay Health Care 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ramsay Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb333435363738394041
Ainsworth Game Technology 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Ainsworth Game unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.70.750.80.850.9

Ramsay Health and Ainsworth Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.73-2.04-1.36-0.670.00.631.281.922.57 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15RHC AGI
       Returns  

Pair Trading with Ramsay Health and Ainsworth Game

The main advantage of trading using opposite Ramsay Health and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.
The idea behind Ramsay Health Care and Ainsworth Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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