Correlation Between Ramsay Health and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and EHEALTH 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 EHEALTH 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 EHEALTH, you can compare the effects of market volatilities on Ramsay Health and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and EHEALTH.
Diversification Opportunities for Ramsay Health and EHEALTH
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and EHEALTH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Ramsay Health i.e., Ramsay Health and EHEALTH go up and down completely randomly.
Pair Corralation between Ramsay Health and EHEALTH
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the EHEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.91 times less risky than EHEALTH. The stock trades about -0.08 of its potential returns per unit of risk. The EHEALTH is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 359.00 in EHEALTH on August 28, 2024 and sell it today you would earn a total of 114.00 from holding EHEALTH or generate 31.75% 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. EHEALTH
Performance |
| Timeline |
| Ramsay Health Care |
| EHEALTH |
Ramsay Health and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and EHEALTH
The main advantage of trading using opposite Ramsay Health and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| Ramsay Health vs. Laureate Education | Ramsay Health vs. BLUESCOPE STEEL | Ramsay Health vs. BlueScope Steel Limited | Ramsay Health vs. IDP EDUCATION LTD |
| EHEALTH vs. FUYO GENERAL LEASE | EHEALTH vs. EAGLE MATERIALS | EHEALTH vs. Fast Retailing Co | EHEALTH vs. Lendlease Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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