Correlation Between Ramsay Health and Poste Italiane
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Poste Italiane 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 Poste Italiane 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 Poste Italiane SpA, you can compare the effects of market volatilities on Ramsay Health and Poste Italiane 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 Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Poste Italiane.
Diversification Opportunities for Ramsay Health and Poste Italiane
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and Poste is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Poste Italiane SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poste Italiane SpA 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 Poste Italiane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poste Italiane SpA has no effect on the direction of Ramsay Health i.e., Ramsay Health and Poste Italiane go up and down completely randomly.
Pair Corralation between Ramsay Health and Poste Italiane
Assuming the 90 days horizon Ramsay Health is expected to generate 3.48 times less return on investment than Poste Italiane. In addition to that, Ramsay Health is 1.62 times more volatile than Poste Italiane SpA. It trades about 0.03 of its total potential returns per unit of risk. Poste Italiane SpA is currently generating about 0.17 per unit of volatility. If you would invest 1,299 in Poste Italiane SpA on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Poste Italiane SpA or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Poste Italiane SpA
Performance |
| Timeline |
| Ramsay Health Care |
| Poste Italiane SpA |
Ramsay Health and Poste Italiane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Poste Italiane
The main advantage of trading using opposite Ramsay Health and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Poste Italiane 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 Poste Italiane will offset losses from the drop in Poste Italiane's long position.| Ramsay Health vs. Universal Health Services | Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. SIVERS SEMICONDUCTORS AB | Ramsay Health vs. NorAm Drilling AS |
| Poste Italiane vs. ITOCHU | Poste Italiane vs. Marubeni | Poste Italiane vs. Sumitomo | Poste Italiane vs. Superior Plus Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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