Correlation Between Ramsay Health and Autosports
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Autosports 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 Autosports 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 Autosports Group, you can compare the effects of market volatilities on Ramsay Health and Autosports 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 Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Autosports.
Diversification Opportunities for Ramsay Health and Autosports
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramsay and Autosports is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Ramsay Health i.e., Ramsay Health and Autosports go up and down completely randomly.
Pair Corralation between Ramsay Health and Autosports
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Autosports. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.26 times less risky than Autosports. The stock trades about -0.06 of its potential returns per unit of risk. The Autosports Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Autosports Group on September 2, 2024 and sell it today you would earn a total of 16.00 from holding Autosports Group or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Autosports Group
Performance |
| Timeline |
| Ramsay Health Care |
| Autosports Group |
Ramsay Health and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Autosports
The main advantage of trading using opposite Ramsay Health and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Ramsay Health vs. Group 6 Metals | Ramsay Health vs. Stelar Metals | Ramsay Health vs. American West Metals | Ramsay Health vs. RLF AgTech |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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