Correlation Between Ramsay Health and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland, you can compare the effects of market volatilities on Ramsay Health and Bank of Queensland 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 Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Bank of Queensland.
Diversification Opportunities for Ramsay Health and Bank of Queensland
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ramsay and Bank is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland 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 Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of Ramsay Health i.e., Ramsay Health and Bank of Queensland go up and down completely randomly.
Pair Corralation between Ramsay Health and Bank of Queensland
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Bank of Queensland. In addition to that, Ramsay Health is 3.46 times more volatile than Bank of Queensland. It trades about -0.04 of its total potential returns per unit of risk. Bank of Queensland is currently generating about 0.07 per unit of volatility. If you would invest 9,660 in Bank of Queensland on September 2, 2024 and sell it today you would earn a total of 667.00 from holding Bank of Queensland or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Bank of Queensland
Performance |
| Timeline |
| Ramsay Health Care |
| Bank of Queensland |
Ramsay Health and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Bank of Queensland
The main advantage of trading using opposite Ramsay Health and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's long position.| Ramsay Health vs. Group 6 Metals | Ramsay Health vs. Stelar Metals | Ramsay Health vs. American West Metals | Ramsay Health vs. RLF AgTech |
| Bank of Queensland vs. Imricor Medical Systems | Bank of Queensland vs. Midway | Bank of Queensland vs. Aristocrat Leisure | Bank of Queensland vs. iShares Global Healthcare |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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