Correlation Between Ramsay Health and EMvision Medical

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Can any of the company-specific risk be diversified away by investing in both Ramsay Health and EMvision Medical 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 EMvision Medical 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 EMvision Medical Devices, you can compare the effects of market volatilities on Ramsay Health and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and EMvision Medical.

Diversification Opportunities for Ramsay Health and EMvision Medical

RamsayEMvisionDiversified AwayRamsayEMvisionDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Ramsay and EMvision is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Ramsay Health i.e., Ramsay Health and EMvision Medical go up and down completely randomly.

Pair Corralation between Ramsay Health and EMvision Medical

Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the EMvision Medical. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 2.36 times less risky than EMvision Medical. The stock trades about -0.07 of its potential returns per unit of risk. The EMvision Medical Devices is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  131.00  in EMvision Medical Devices on November 30, 2024 and sell it today you would earn a total of  54.00  from holding EMvision Medical Devices or generate 41.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ramsay Health Care  vs.  EMvision Medical Devices

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5051015
JavaScript chart by amCharts 3.21.15RHC EMV
       Timeline  
Ramsay Health Care 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ramsay Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb333435363738394041
EMvision Medical Devices 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days EMvision Medical Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EMvision Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.81.851.91.9522.052.1

Ramsay Health and EMvision Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.73-2.04-1.36-0.670.00.631.281.922.57 0.060.080.100.120.14
JavaScript chart by amCharts 3.21.15RHC EMV
       Returns  

Pair Trading with Ramsay Health and EMvision Medical

The main advantage of trading using opposite Ramsay Health and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.
The idea behind Ramsay Health Care and EMvision Medical Devices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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