Correlation Between Ramsay Health and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Carnegie Clean 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 Carnegie Clean 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 Carnegie Clean Energy, you can compare the effects of market volatilities on Ramsay Health and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Carnegie Clean.
Diversification Opportunities for Ramsay Health and Carnegie Clean
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and Carnegie is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Ramsay Health i.e., Ramsay Health and Carnegie Clean go up and down completely randomly.
Pair Corralation between Ramsay Health and Carnegie Clean
Assuming the 90 days trading horizon Ramsay Health Care is expected to generate 0.36 times more return on investment than Carnegie Clean. However, Ramsay Health Care is 2.81 times less risky than Carnegie Clean. It trades about -0.05 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.06 per unit of risk. If you would invest 5,042 in Ramsay Health Care on September 1, 2024 and sell it today you would lose (1,083) from holding Ramsay Health Care or give up 21.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Carnegie Clean Energy
Performance |
| Timeline |
| Ramsay Health Care |
| Carnegie Clean Energy |
Ramsay Health and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Carnegie Clean
The main advantage of trading using opposite Ramsay Health and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Ramsay Health vs. Aneka Tambang Tbk | Ramsay Health vs. ANZ Group Holdings | Ramsay Health vs. Australia and New | Ramsay Health vs. ANZ Group Holdings |
| Carnegie Clean vs. Computershare | Carnegie Clean vs. Australian Unity Office | Carnegie Clean vs. MotorCycle Holdings | Carnegie Clean vs. Bailador Technology Invest |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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