Correlation Between Ramsay Health and La Française
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and La Française 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 La Française 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 La Franaise des, you can compare the effects of market volatilities on Ramsay Health and La Française 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 La Française. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and La Française.
Diversification Opportunities for Ramsay Health and La Française
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ramsay and 1WE is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des 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 La Française. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of Ramsay Health i.e., Ramsay Health and La Française go up and down completely randomly.
Pair Corralation between Ramsay Health and La Française
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the La Française. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.0 times less risky than La Française. The stock trades about -0.09 of its potential returns per unit of risk. The La Franaise des is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,390 in La Franaise des on September 3, 2024 and sell it today you would earn a total of 336.00 from holding La Franaise des or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. La Franaise des
Performance |
| Timeline |
| Ramsay Health Care |
| La Franaise des |
Ramsay Health and La Française Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and La Française
The main advantage of trading using opposite Ramsay Health and La Française positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, La Française 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 La Française will offset losses from the drop in La Française's long position.| Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. NMI Holdings | Ramsay Health vs. Origin Agritech | Ramsay Health vs. SIVERS SEMICONDUCTORS AB |
| La Française vs. Bausch Health Companies | La Française vs. SENECA FOODS A | La Française vs. Ramsay Health Care | La Française vs. NXP Semiconductors NV |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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