Correlation Between Ramsay Health and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies, you can compare the effects of market volatilities on Ramsay Health and Hansen Technologies 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 Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Hansen Technologies.
Diversification Opportunities for Ramsay Health and Hansen Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and Hansen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies 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 Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Ramsay Health i.e., Ramsay Health and Hansen Technologies go up and down completely randomly.
Pair Corralation between Ramsay Health and Hansen Technologies
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Hansen Technologies. In addition to that, Ramsay Health is 1.4 times more volatile than Hansen Technologies. It trades about -0.27 of its total potential returns per unit of risk. Hansen Technologies is currently generating about -0.12 per unit of volatility. If you would invest 535.00 in Hansen Technologies on October 15, 2024 and sell it today you would lose (11.00) from holding Hansen Technologies or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Hansen Technologies
Performance |
| Timeline |
| Ramsay Health Care |
| Hansen Technologies |
Ramsay Health and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Hansen Technologies
The main advantage of trading using opposite Ramsay Health and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Ramsay Health vs. Iron Road | Ramsay Health vs. Bisalloy Steel Group | Ramsay Health vs. Champion Iron | Ramsay Health vs. Australian Unity Office |
| Hansen Technologies vs. Charter Hall Education | Hansen Technologies vs. Carnegie Clean Energy | Hansen Technologies vs. Ramsay Health Care | Hansen Technologies vs. Global Health |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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