Correlation Between Ramsay Health and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on Ramsay Health and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and NAKED WINES.
Diversification Opportunities for Ramsay Health and NAKED WINES
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramsay and NAKED is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of Ramsay Health i.e., Ramsay Health and NAKED WINES go up and down completely randomly.
Pair Corralation between Ramsay Health and NAKED WINES
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the NAKED WINES. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 2.13 times less risky than NAKED WINES. The stock trades about -0.14 of its potential returns per unit of risk. The NAKED WINES PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 71.00 in NAKED WINES PLC on September 19, 2024 and sell it today you would lose (14.00) from holding NAKED WINES PLC or give up 19.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. NAKED WINES PLC
Performance |
| Timeline |
| Ramsay Health Care |
| NAKED WINES PLC |
Ramsay Health and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and NAKED WINES
The main advantage of trading using opposite Ramsay Health and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES'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 |
| NAKED WINES vs. Richardson Electronics | NAKED WINES vs. QINGCI GAMES INC | NAKED WINES vs. GAMESTOP | NAKED WINES vs. Hochschild Mining plc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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