Correlation Between Ramsay Health and Bendigo
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Bendigo 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 Bendigo 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 Bendigo and Adelaide, you can compare the effects of market volatilities on Ramsay Health and Bendigo 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 Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Bendigo.
Diversification Opportunities for Ramsay Health and Bendigo
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ramsay and Bendigo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Bendigo and Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo and Adelaide 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 Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo and Adelaide has no effect on the direction of Ramsay Health i.e., Ramsay Health and Bendigo go up and down completely randomly.
Pair Corralation between Ramsay Health and Bendigo
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Bendigo. In addition to that, Ramsay Health is 4.96 times more volatile than Bendigo and Adelaide. It trades about -0.06 of its total potential returns per unit of risk. Bendigo and Adelaide is currently generating about -0.06 per unit of volatility. If you would invest 10,468 in Bendigo and Adelaide on October 22, 2024 and sell it today you would lose (28.00) from holding Bendigo and Adelaide or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ramsay Health Care vs. Bendigo and Adelaide
Performance |
| Timeline |
| Ramsay Health Care |
| Bendigo and Adelaide |
Ramsay Health and Bendigo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Bendigo
The main advantage of trading using opposite Ramsay Health and Bendigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Bendigo 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 Bendigo will offset losses from the drop in Bendigo's long position.| Ramsay Health vs. Group 6 Metals | Ramsay Health vs. EMvision Medical Devices | Ramsay Health vs. Sky Metals | Ramsay Health vs. Centaurus Metals |
| Bendigo vs. Zoom2u Technologies | Bendigo vs. Advanced Braking Technology | Bendigo vs. Technology One | Bendigo vs. Ainsworth Game Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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