Correlation Between Ramsay Health and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and COAST ENTERTAINMENT 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 COAST ENTERTAINMENT 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 COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Ramsay Health and COAST ENTERTAINMENT 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 COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and COAST ENTERTAINMENT.
Diversification Opportunities for Ramsay Health and COAST ENTERTAINMENT
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ramsay and COAST is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT 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 COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of Ramsay Health i.e., Ramsay Health and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Ramsay Health and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the COAST ENTERTAINMENT. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.86 times less risky than COAST ENTERTAINMENT. The stock trades about -0.06 of its potential returns per unit of risk. The COAST ENTERTAINMENT HOLDINGS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 46.00 in COAST ENTERTAINMENT HOLDINGS on September 12, 2024 and sell it today you would earn a total of 1.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Ramsay Health Care vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Ramsay Health Care |
| COAST ENTERTAINMENT |
Ramsay Health and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and COAST ENTERTAINMENT
The main advantage of trading using opposite Ramsay Health and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, COAST ENTERTAINMENT 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 COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT'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 |
| COAST ENTERTAINMENT vs. WiseTech Global Limited | COAST ENTERTAINMENT vs. My Foodie Box | COAST ENTERTAINMENT vs. Ras Technology Holdings | COAST ENTERTAINMENT vs. Retail Food Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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