Correlation Between Ramsay Health and Summerset Group
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Summerset Group 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 Summerset Group 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 Summerset Group Holdings, you can compare the effects of market volatilities on Ramsay Health and Summerset Group 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 Summerset Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Summerset Group.
Diversification Opportunities for Ramsay Health and Summerset Group
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and Summerset is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Summerset Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summerset Group Holdings 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 Summerset Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summerset Group Holdings has no effect on the direction of Ramsay Health i.e., Ramsay Health and Summerset Group go up and down completely randomly.
Pair Corralation between Ramsay Health and Summerset Group
Assuming the 90 days trading horizon Ramsay Health is expected to generate 3.54 times less return on investment than Summerset Group. But when comparing it to its historical volatility, Ramsay Health Care is 7.07 times less risky than Summerset Group. It trades about 0.09 of its potential returns per unit of risk. Summerset Group Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Summerset Group Holdings on December 4, 2024 and sell it today you would earn a total of 342.00 from holding Summerset Group Holdings or generate 44.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Ramsay Health Care vs. Summerset Group Holdings
Performance |
| Timeline |
| Ramsay Health Care |
| Summerset Group Holdings |
Ramsay Health and Summerset Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Summerset Group
The main advantage of trading using opposite Ramsay Health and Summerset Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Summerset Group 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 Summerset Group will offset losses from the drop in Summerset Group's long position.| Ramsay Health vs. Computershare | Ramsay Health vs. Global Health | Ramsay Health vs. Healthco Healthcare and | Ramsay Health vs. Aussie Broadband |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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