Correlation Between Ramsay Health and Carindale Property
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Carindale Property 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 Carindale Property 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 Carindale Property Trust, you can compare the effects of market volatilities on Ramsay Health and Carindale Property 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 Carindale Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Carindale Property.
Diversification Opportunities for Ramsay Health and Carindale Property
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ramsay and Carindale is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Carindale Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carindale Property Trust 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 Carindale Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carindale Property Trust has no effect on the direction of Ramsay Health i.e., Ramsay Health and Carindale Property go up and down completely randomly.
Pair Corralation between Ramsay Health and Carindale Property
Assuming the 90 days trading horizon Ramsay Health Care is expected to generate 1.21 times more return on investment than Carindale Property. However, Ramsay Health is 1.21 times more volatile than Carindale Property Trust. It trades about 0.04 of its potential returns per unit of risk. Carindale Property Trust is currently generating about 0.04 per unit of risk. If you would invest 3,843 in Ramsay Health Care on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Ramsay Health Care or generate 1.07% 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. Carindale Property Trust
Performance |
| Timeline |
| Ramsay Health Care |
| Carindale Property Trust |
Ramsay Health and Carindale Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Carindale Property
The main advantage of trading using opposite Ramsay Health and Carindale Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Carindale Property 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 Carindale Property will offset losses from the drop in Carindale Property's long position.| Ramsay Health vs. Autosports Group | Ramsay Health vs. Alternative Investment Trust | Ramsay Health vs. BKI Investment | Ramsay Health vs. Australian United Investment |
| Carindale Property vs. Charter Hall Retail | Carindale Property vs. GDI Property Group | Carindale Property vs. Australian Unity Office | Carindale Property vs. Ecofibre |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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