Correlation Between Ramsay Health and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Ramsay Health and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and OOhMedia.
Diversification Opportunities for Ramsay Health and OOhMedia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ramsay and OOhMedia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Ramsay Health i.e., Ramsay Health and OOhMedia go up and down completely randomly.
Pair Corralation between Ramsay Health and OOhMedia
Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the OOhMedia. In addition to that, Ramsay Health is 1.45 times more volatile than oOhMedia. It trades about -0.34 of its total potential returns per unit of risk. oOhMedia is currently generating about 0.25 per unit of volatility. If you would invest 114.00 in oOhMedia on October 14, 2024 and sell it today you would earn a total of 5.00 from holding oOhMedia or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. oOhMedia
Performance |
| Timeline |
| Ramsay Health Care |
| oOhMedia |
Ramsay Health and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and OOhMedia
The main advantage of trading using opposite Ramsay Health and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Ramsay Health vs. Iron Road | Ramsay Health vs. Bisalloy Steel Group | Ramsay Health vs. Champion Iron | Ramsay Health vs. Australian Unity Office |
| OOhMedia vs. Cleanaway Waste Management | OOhMedia vs. Regal Funds Management | OOhMedia vs. Ramsay Health Care | OOhMedia vs. EROAD |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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