Correlation Between Vitura Health and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Vitura Health and Ramsay Health 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 Vitura Health and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitura Health Limited and Ramsay Health Care, you can compare the effects of market volatilities on Vitura Health and Ramsay Health 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 Vitura Health with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitura Health and Ramsay Health.
Diversification Opportunities for Vitura Health and Ramsay Health
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vitura and Ramsay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vitura Health Limited and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care and Vitura 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 Vitura Health Limited are associated (or correlated) with Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of Vitura Health i.e., Vitura Health and Ramsay Health go up and down completely randomly.
Pair Corralation between Vitura Health and Ramsay Health
Assuming the 90 days trading horizon Vitura Health Limited is expected to generate 3.49 times more return on investment than Ramsay Health. However, Vitura Health is 3.49 times more volatile than Ramsay Health Care. It trades about 0.02 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.11 per unit of risk. If you would invest 7.90 in Vitura Health Limited on November 2, 2024 and sell it today you would lose (0.30) from holding Vitura Health Limited or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitura Health Limited vs. Ramsay Health Care
Performance |
| Timeline |
| Vitura Health Limited |
| Ramsay Health Care |
Vitura Health and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitura Health and Ramsay Health
The main advantage of trading using opposite Vitura Health and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitura Health position performs unexpectedly, Ramsay Health 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 Ramsay Health will offset losses from the drop in Ramsay Health's long position.| Vitura Health vs. Air New Zealand | Vitura Health vs. Insignia Financial | Vitura Health vs. COG Financial Services | Vitura Health vs. Medibank Private |
| Ramsay Health vs. Aspire Mining | Ramsay Health vs. Lendlease Group | Ramsay Health vs. Globe Metals Mining | Ramsay Health vs. My Foodie Box |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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