Correlation Between Ramsay Health and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE, you can compare the effects of market volatilities on Ramsay Health and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and THAI BEVERAGE.
Diversification Opportunities for Ramsay Health and THAI BEVERAGE
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ramsay and THAI is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Ramsay Health i.e., Ramsay Health and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Ramsay Health and THAI BEVERAGE
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the THAI BEVERAGE. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 3.11 times less risky than THAI BEVERAGE. The stock trades about -0.06 of its potential returns per unit of risk. The THAI BEVERAGE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15.00 in THAI BEVERAGE on September 4, 2024 and sell it today you would earn a total of 24.00 from holding THAI BEVERAGE or generate 160.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ramsay Health Care vs. THAI BEVERAGE
Performance |
| Timeline |
| Ramsay Health Care |
| THAI BEVERAGE |
Ramsay Health and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and THAI BEVERAGE
The main advantage of trading using opposite Ramsay Health and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE'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 |
| THAI BEVERAGE vs. TOTAL GABON | THAI BEVERAGE vs. Walgreens Boots Alliance | THAI BEVERAGE vs. Peak Resources Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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