Correlation Between Ramsay Health and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Cooper Metals 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 Cooper Metals 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 Cooper Metals, you can compare the effects of market volatilities on Ramsay Health and Cooper Metals 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 Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Cooper Metals.
Diversification Opportunities for Ramsay Health and Cooper Metals
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramsay and Cooper is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals 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 Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Ramsay Health i.e., Ramsay Health and Cooper Metals go up and down completely randomly.
Pair Corralation between Ramsay Health and Cooper Metals
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Cooper Metals. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 5.33 times less risky than Cooper Metals. The stock trades about -0.06 of its potential returns per unit of risk. The Cooper Metals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Cooper Metals on September 12, 2024 and sell it today you would lose (18.50) from holding Cooper Metals or give up 80.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Cooper Metals
Performance |
| Timeline |
| Ramsay Health Care |
| Cooper Metals |
Ramsay Health and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Cooper Metals
The main advantage of trading using opposite Ramsay Health and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.| Ramsay Health vs. Autosports Group | Ramsay Health vs. Alternative Investment Trust | Ramsay Health vs. BKI Investment | Ramsay Health vs. Australian United Investment |
| Cooper Metals vs. Aristocrat Leisure | Cooper Metals vs. Dicker Data | Cooper Metals vs. Champion Iron | Cooper Metals vs. Data3 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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