Correlation Between Ramsay Health and Fresenius
Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Fresenius 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 Fresenius 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 Fresenius SE Co, you can compare the effects of market volatilities on Ramsay Health and Fresenius 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 Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Fresenius.
Diversification Opportunities for Ramsay Health and Fresenius
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramsay and Fresenius is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of Ramsay Health i.e., Ramsay Health and Fresenius go up and down completely randomly.
Pair Corralation between Ramsay Health and Fresenius
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the Fresenius. In addition to that, Ramsay Health is 1.38 times more volatile than Fresenius SE Co. It trades about -0.25 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.47 per unit of volatility. If you would invest 862.00 in Fresenius SE Co on November 3, 2024 and sell it today you would earn a total of 97.00 from holding Fresenius SE Co or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ramsay Health Care vs. Fresenius SE Co
Performance |
| Timeline |
| Ramsay Health Care |
| Fresenius SE |
Ramsay Health and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Fresenius
The main advantage of trading using opposite Ramsay Health and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health position performs unexpectedly, Fresenius 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 Fresenius will offset losses from the drop in Fresenius' long position.| Ramsay Health vs. Medical Facilities | Ramsay Health vs. Fresenius SE Co | Ramsay Health vs. Jack Nathan Medical | Ramsay Health vs. Nova Leap Health |
| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap Health |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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