Correlation Between WashTec AG and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both WashTec AG 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 WashTec AG and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WashTec AG and Ramsay Health Care, you can compare the effects of market volatilities on WashTec AG 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 WashTec AG with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of WashTec AG and Ramsay Health.
Diversification Opportunities for WashTec AG and Ramsay Health
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WashTec and Ramsay is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding WashTec AG 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 WashTec AG 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 WashTec AG 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 WashTec AG i.e., WashTec AG and Ramsay Health go up and down completely randomly.
Pair Corralation between WashTec AG and Ramsay Health
Assuming the 90 days horizon WashTec AG is expected to generate 0.84 times more return on investment than Ramsay Health. However, WashTec AG is 1.19 times less risky than Ramsay Health. It trades about 0.1 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 304.00 in WashTec AG on November 3, 2024 and sell it today you would earn a total of 104.00 from holding WashTec AG or generate 34.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WashTec AG vs. Ramsay Health Care
Performance |
| Timeline |
| WashTec AG |
| Ramsay Health Care |
WashTec AG and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WashTec AG and Ramsay Health
The main advantage of trading using opposite WashTec AG and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WashTec AG 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.| WashTec AG vs. Ramsay Health Care | WashTec AG vs. Medical Facilities | WashTec AG vs. Jack Nathan Medical | WashTec AG vs. Fresenius SE Co |
| Ramsay Health vs. Medical Facilities | Ramsay Health vs. Fresenius SE Co | Ramsay Health vs. Jack Nathan Medical | Ramsay Health 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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